The general answer to how long you will spend in county jail for California tax evasion is one year. However, the state has two codes devoted to breaking down tax evasion. These statutes are California Revenue and Taxation Code Sections 19705 and 19706. Each code has separate punishments, which may include prison time and not jail time.
Tax evasion in California is the illegal act of not filing a tax return, not reporting all income or making false statements. All are purposefully done to avoid paying taxes or a portion of taxes to the state. It is also considered tax evasion to falsely claim that you reside in another state to avoid paying all taxes to California. Here is a complete breakdown of the specific time you or a family member may spend behind bars if you are convicted of tax evasion.
Conviction of California Revenue and Taxation Code Section 19706
Section 19706 makes it illegal for any individual, company or officer to willfully file a false tax return or fail to file a tax return in the state. It also makes it unlawful to provide information that is false or fraudulent with the intent to avoid paying taxes to the state. If you are accused signing, rendering or verifying any false tax return or statement, you may be accused of tax evasion under section 19706.
If you are convicted of section 19706 (a misdemeanor), you face about one year in county jail and may be ordered to pay a $20,000 fine.
California considers section 19706 a “wobbler.” A wobbler is a crime that can be charged as a misdemeanor or felony depending on the facts of the case. For instance, you may be initially charged with a misdemeanor, but the charge may be increased to a felony later based on finding a more serious fraudulent act. A felony tax evasion charge is more serious than the misdemeanor charge. If you are convicted of felony tax evasion under section 19706, you face one year in state prison. The fine of $20,000 is the same for a misdemeanor and felony tax evasion conviction under section 19706.
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Tax Evasion Under Section 19705
Section 19705 makes it unlawful to purposefully make or provide a fraudulent statement, tax return or any other document as true. You may notice every time you sign a tax return it contains a written declaration that you are telling the truth under penalty of perjury that the information is correct. If proven otherwise, the state can claim you willing falsified tax information with the intent of passing it off as the truth to avoid paying state taxes.
According to section 19705, it is also unlawful to falsify any material matter of the tax return or tax record to avoid paying the correct amount of taxes. To be convicted, you must have known at the time the information was false. A simple misunderstanding or neglect is not the same as willfully or intentionally providing false information.
Section 19705 includes prison time (not county jail) because it is a felony crime. The punishment comes with up to a $50,000 fine and one of the following state prison sentences:
- 16 months in state prison
- Two years in state prison; OR
- Three years in prison
Other Penalties Associated with Tax Evasion in California
Besides county jail time, the state will look to collect the amount taxes you allegedly owe. The tax agency will start the collection process by suing you in civil court. If you are found liable of tax evasion in civil court, there will be a tax lien applied against properties you own. If you cannot pay the back taxes, the agency will obtain a warrant for your property and seize the property. After seizing the property, it may be sold to satisfy the debt owed.
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State Tax Evasion Vs. Federal Tax Evasion Punishments
California tax evasion is a separate crime than federal tax evasion. The punishment for federal tax evasion depends on the specific crime you are accused of committing. For instance, a charge for attempting to evade paying taxes — this means you tried to unlawfully decrease your federal taxes — a felony punishable by at least five years in federal prison. For more information, you will want to discuss the particulars of your case with an experienced criminal defense attorney in LA.
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Is Tax Avoidance a Crime in California?
Tax evasion is against the law in California, but tax avoidance is not illegal. Tax avoidance is an aggressive way to minimize your tax burden, such as taking advantage of valid state deductions. To be convicted of tax evasion in California beyond simple tax avoidance, several things must be proven by the prosecution:
- You provided a tax return or made a statement to the Board of Equalization, Franchise Tax Board or Employment Development Department. These state agencies are responsible for collecting taxes or making disability payments. You can also get into trouble by verifying that the tax return is correct.
- The tax return or statement you provided to the agency or agencies was false.
- When you gave the statement or tax return, you knew the information was false or fraudulent.
Have you or your family member been accused of or charged with tax evasion? Avoid California tax evasion jail time with the help of Simmrin Law Group. We are ready to help you prove your innocence. Call us today at 310-997-4688 for a FREE case review and kick start the legal defense for your tax evasion charge. It is time to fight your tax evasion charge and get on with your life.