March 13, 2017 By Paul Wallin


Filing Fake Tax Returns and California Tax Fraud (Revenue and Tax Code Section 19706)

What happens when a person decides to use a tax return to defraud the government? Recently, a California man was sentenced to 12 years in federal prison for using the identities of dead people on tax returns he filed with the IRS. He then stole the refund checks he received as a result. In addition to the 12 years in prison, he was ordered to repay over $900,000 to the IRS.

Filing fake tax returns is a serious crime. However, most tax crime involves attempting to evade paying your own taxes rather than trying to steal refunds from the government. Regardless of which type of tax fraud you are accused of, you face serious penalties.

Twin Punishments for Tax Fraud

If you intentionally file a false tax return for the purpose of evading a tax, you could be committing both a state and a federal crime. First, under California Revenue and Tax Code Section 19706, it is against the law to:

  • Knowingly fail to file any tax return or to supply any information with intent to evade any tax; or
  • Willfully and intentionally make, render, sign or verify any false or fraudulent return or statement or supply any false or fraudulent information.

Under California Revenue and Tax Code Section 19706, tax evasion is punishable by up to 364 days in county jail or state prison and a fine of up to $20,000.

The federal crime is punished more severely. Under 26 U.S.C. Section 7201, intentionally filing a false tax return is punishable by up to five years in federal prison and a maximum fine of $100,000.

The Practical Problem of Enforcement

Prosecuting a tax fraud case is extremely difficult. In California, the prosecution must prove all of the following beyond a reasonable doubt:

  • You made or verified a tax return or statement provided to the Franchise Tax Board (the agency that collects income taxes), Board of Equalization (the agency that collects corporate sales and use taxes) or Employment Development Department (the agency that pays out employee disability and unemployment benefits);
  • The tax return or statement was false or fraudulent;
  • When you supplied the information, you knew that the information was false or fraudulent; AND
  • You knowingly and intentionally violated a legal duty and intended to unlawfully evade paying a tax.

Of these elements, the last two can be especially difficult to prove because it is difficult to show that you knew the information was false, and that you knew you were violating the law by intending to evade paying your taxes.

For this reason, many cases result in an audit, where under reported income is punished through adding a penalty to the tax that is owed.

The Defense Attorneys at Wallin & Klarich Can Help You

If you or someone you care about is facing tax fraud charges, it is vital that you retain an experienced criminal defense attorney as soon as possible. At Wallin & Klarich, our attorneys have been successfully defending clients facing both federal and state tax crime charges for over 40 years. We will use all of our criminal defense expertise and knowledge of the law to help you obtain the best possible outcome in your case.

With offices in Orange County, Riverside, San Bernardino, Los Angeles, San Diego, West Covina, Torrance and Victorville, there is an experienced Wallin & Klarich criminal defense attorney available to help you no matter where you are located.

Contact our offices today at (877) 4-NO-JAIL or (877) 466-5245 for a free, no-obligation phone consultation. We will get through this together.

AUTHOR: Paul Wallin

Paul Wallin is one of the most highly respected attorneys in Southern California. His vast experience, zealous advocacy for his clients and extensive knowledge of many areas of the law make Mr. Wallin a premiere Southern California attorney. Mr. Wallin founded Wallin & Klarich in 1981. As the senior partner of Wallin & Klarich, Mr. Wallin has been successfully representing clients for more than 30 years. Clients come to him for help in matters involving assault and battery, drug crimes, juvenile crimes, theft, manslaughter, sex offenses, murder, violent crimes, misdemeanors and felonies. Mr. Wallin also helps clients with family law matters such as divorce and child custody.

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