As the saying goes, the only certainties in life are death and taxes. While the Internal Revenue Service is known for strict enforcement of federal income tax collection, state laws generally use financial incentives (mainly fines and interest). In North Carolina, tax evasion and fraud is punished by a penalty equaling 50 percent of your unpaid tax bill. The penalties are less severe for late payment, but increase with time.
Tax Evasion and Fraud Statutes in North Carolina
The following table highlights some of the main provisions of North Carolina tax evasion and fraud laws.
| Code Section | North Carolina General Statutes § 105-130, et seq. |
| Penalties and Interest for Unpaid Taxes | 5% (of unpaid tax) monthly penalty for not filing by original due date, cannot exceed 25% of tax total 10% late payment penalty (exempt if 90% of taxes paid and extension is granted) 20% collection assistance fee on any tax, penalty, and interest not paid within 90 days after debt becomes collectible (exempt if you are making payments under an installment agreement) |
| Penalties for Fraud and Evasion | 50% fraud penalty if evidence of fraud or evasion is discovered |
| Right to Appeal? | Yes |
The Internal Revenue Code that covers taxes is complicated and tax forms can seem impossible to comprehend. Since most of us aren’t accountants or other tax professionals, it’s understandable that we might make some mistakes or underpay our taxes. While we should always be as careful as possible when filling out our tax forms, you should also know that there’s no need to worry about being convicted for tax evasion because of a simple error. In order to be charged with a crime, the IRS must prove that you deliberately tried to underpay your taxes. If you simply made an innocent mistake filling out your taxes, you’ll probably still have to pay what you should have paid (and maybe an additional fine) but you won’t be subject to the time, expense, and penalties of a criminal trial.
North Carolina Tax Evasion and Fraud Laws: Related Resources
State laws are constantly changing, and criminal statutes and the tax code can be the most confusing areas of the law. You contact a North Carolina criminal defense attorney or tax attorney if you would like legal assistance with an existing case. You can also continue your own legal research by visiting FindLaw's Tax Evasion and Fraud section for related articles.
