Tax Evasion in California

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Filing taxes online using a computer and being audited

Tax Evasion in California

When a person is a resident of California, the law requires them to pay taxes to the government. Taxation can occur at multiple levels and come from various sources. Individuals have to file a tax return and based on their personal income, they are taxed a certain amount. However, some people purposefully lie or do not file one so that they pay less in taxes. According to California Revenue and Taxation Code Section 19706, tax evasion is a serious crime in the state.


Elements for Tax Evasion

Tax evasion can occur in a variety of ways. To pay less in taxes than they should, individuals will not report all sources of income, state a lower earned income, put false information in their tax return or lie about their state residency. These are not all of the possible ways to underpay, as some people hide money or divert earnings through incredibly intricate methods. It is also illegal to willfully sign or file a false return – or not even file one in the first place.

For the prosecution to prove that the defendant committed tax evasion, there must be proof that the defendant provided a tax return or statement to the appropriate tax collection agency that contained false information. The defendant must have known that the return or statement was false and had the intent to evade taxation.


What Happens if You’re Found Guilty?

Tax evasion is a white-collar crime and it has severe consequences if the defendant is found guilty. In California, the crime can be committed against the Franchise Tax Board, the Board of Equalization, and the Employment Development Department. Following an audit, the person can be forced to pay fines, go to jail, and have all of the taxes they owed collected by the state. This means the convicted person’s property can be seized, the convict can be sued, or, if the person can’t pay back the taxes, bankruptcy can be declared.


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