Both state regulations and federal laws require that people pay income taxes. People accused of violating tax ordinances often face federal prosecution. However, they could face criminal charges in the state criminal courts instead.
Obviously, federal laws apply to federal income tax issues. Ohio state statutes govern state-level tax matters. People in one of two main scenarios may find themselves accused of income tax evasion in the Ohio criminal courts.
What circumstances constitute tax evasion according to Ohio law?
Failing to file a return
At the federal level, choosing not to file a return is not necessarily evasion. So long as the taxpayer did not have a balance due but instead either broke even or deserved a refund, the failure to file a tax return does not necessarily lead to any sort of tax controversy.
That is not the case under state law. The failure to file an income tax return in Ohio can be adequate justification for the state to pursue tax evasion charges in some cases.
Intentionally underpaying taxes
Tax avoidance is perfectly lawful. Many people make retirement account contributions or donate to charity to reduce their taxable income for the year. Others make use of write-offs and deductions as a means of reducing their tax liability.
Provided that people honestly report their circumstances, seeking to limit income taxes is perfectly legal. However, the intentional misrepresentation of circumstances, such as claiming a 20-year-old as a minor dependent, could cross the line into tax evasion. Inappropriate uses of credits, failing to report income and taking deductions that the taxpayer does not qualify for could also all lead to allegations of tax evasion.
Those accused of tax evasion are at risk of financial consequences. Not only do they need to pay the amount of income taxes they owe, but they may also have to pay fines and interest on the amount due. They could also be at risk of incarceration, especially in scenarios where tax evasion leads to a sizeable past-due balance.
Those accused of tax evasion may need help evaluating their returns and other financial records, and that’s okay. Fighting back against tax evasion charges requires an understanding of the law and a calm approach to negotiations with state authorities.