The stress that accompanies tax day can make anyone dizzy just at the thought of trying to properly fill in all of those form. The IRS understands that filing taxes is not a simple task. While most states will allow taxpayers to make a few mistakes, Vermont tax fraud and tax evasion laws are designed to punish those taxpayers that completely fail to file or pay their taxes. This is a quick summary of the tax fraud and tax evasion laws in Vermont.
Facing Interest and Penalties Under Vermont Tax Fraud and Tax Evasion Laws
Vermont tax evasion laws tack on an interest to any taxpayers that fails to timely pay their taxes in full. The Vermont Department of Taxes may also assess penalties in addition to this interest if the tax commissioner believes the taxpayer's failure to pay is either fraudulent or negligent.
The following table outlines the specifics of Vermont tax fraud and tax evasion laws.
| Code Sections | 32 V.S.A. §3202: Interest and Penalties |
| Failure to File/Pay | According to Vermont tax laws, when a taxpayer fails to file a tax return or fails to pay a tax owed, the Commissioner may assess a penalty of up to 5% of the outstanding tax liability for each month. However, in no event may the amount of any penalty exceed 25% of the unpaid tax liability. |
| Fraudulent Failure to Pay | When a taxpayer fraudulently or with willful intent to evade a tax liability, either fails to pay a tax liability or receives a refund of a tax liability, the Commissioner may assess a penalty equal to the amount of the unpaid tax liability or amount received as a refund. |
| Negligent Failure to Pay | When a taxpayer fails to pay a tax liability and the failure is due to negligence or constitutes a substantial understatement of tax, the Commissioner may assess a penalty up to 25% of the portion of the underpayment. Vermont tax laws define "negligence" as any failure to make a reasonable attempt to comply with the tax code and "substantial understatement" as an understatement of 20% or more of the tax. |
| Interest on a Failure to Pay | When a taxpayer fails to pay a tax liability, the taxpayer will pay the amount actually owed and a sum of interest computed at the rate per annum established by the Commissioner. |
If you have been accused of violating tax fraud or tax evasion laws and require legal advice, you can contact a Vermont tax lawyer through FindLaw. Visit FindLaw’s sections on tax evasion and other Vermont tax laws for more articles and information on this topic.
