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, including prison time and no 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. Therefore, if you are accused of 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 a misdemeanor or felony, depending on the facts of the case. For instance, you may be initially charged with a misdemeanor, but the charge can be increased to a felony later based on finding a more serious fraudulent act. A felony tax evasion charge is more serious than a 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.
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, and it contains a written declaration that you are telling the truth under penalty of perjury and that the information is correct. If proven otherwise, the state can claim you willingly 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 record to avoid paying the correct amount of taxes. To be convicted, you must have known the information was false at the time. 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 Evading Taxes in California
Besides county jail time, the state will look to collect the amount of taxes you allegedly owe. The tax agency will start the collection process by suing you in civil court. If you are liable for tax evasion in civil court, a tax lien will be 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.
State Tax Evasion Vs. Federal Tax Evasion Punishments
California tax evasion is a separate crime from 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.
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.
- Your tax return or statement to the agency or agencies was false.
- When you gave the statement or tax return, you knew the information was false or fraudulent.
When a criminal defense lawyer represents you, he can help you build a strong defense. For example, your lawyer will conduct interviews and discovery sessions that allow him to see and evaluate the evidence the state has against you. These factors can work toward developing a credible defense strategy.
Acts That Constitute Tax Evasion in California
You could be found guilty of tax evasion for failing to file taxes, failing to report your income accurately, or intentionally falsifying tax documents. Other acts that may be considered tax evasion can include the following:
- Failure to report income gained via illegal means
- Failure to report income earned as tips or gratuities
- Failure to report income earned via ‘side gigs’ such as tutoring, dog-walking, or shoveling snow
- Failure to report interest earned on outstanding loans
- Knowingly or intentionally paying fewer taxes than are owed
This list is in no way exhaustive, as tax evasion can occur in a myriad of ways, both intentional and unintentional.
You do not have to tackle these difficult circumstances and their potential penalties alone. A local attorney familiar with state and federal tax laws can help you fight back against accusations of tax evasion.
An Attorney Can Help You Understand California’s Complex Tax Laws
Understanding what constitutes tax evasion is only the beginning of your potential case. So is understanding the amount of time you could potentially serve in a California jail or prison upon conviction. Understanding tax laws and how they relate to your case can be much more complicated.
The lawyer who handles your case will:
- Obtain and review the tax records in question
- Represent you during any resulting tax audits
- Review additional financial information and documents
Your lawyer will also help you understand how you can come into compliance with the state’s tax laws and payments. Finally, if you are facing jail time, your lawyer will help you mitigate the penalty phase of your case and start getting your personal, professional, and financial life into proper order.
Possible Defenses to Tax Evasion Charges in California
Like most people, you likely want to avoid jail time whenever possible. However, if you face potential conviction and jail time for tax evasion, the attorney representing you can help you build a compelling defense that might help you avoid the state’s harsh penalties.
A charge of tax evasion against you must be proven. Defense to these charges can include proving that you did not personally prepare your tax returns and were unaware of the error in question. Your lawyer can also help you file an amended tax return, where permissible.
In addition, the state has a statute of limitations on tax liability, according to California Revenue and Taxation Code Section 19255. Your lawyer will ensure the state complies with the appropriate filing deadline. He will also locate and interview witnesses, collect and compile documents from various sources, and consult additional experts to build your defense.
Contact a Criminal Defense Attorney for Help with Your Tax Evasion Charge Today
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 for a free case review and kick-start the legal defense for your tax evasion charge. Then, it is time to fight your charge and get on with your life.