While complying with federal and state tax laws is important for all individuals, it is especially the case for those who operate a business or hold a professional license. This is because violating these regulations results in far worse than civil penalties. Rather, it can threaten your personal freedom and professional livelihood all in one fell swoop, so to speak. With that being said, please read on to discover whether failing to pay sales tax is considered a form of tax fraud and how a seasoned Morristown criminal defense lawyer at Graves Andrews, LLC, can help you understand the extensive consequences of being accused of such.
What happens if my business fails to pay sales tax in New Jersey?
In the state of New Jersey, it may be considered tax fraud when a business or individual willfully and intentionally acts to evade paying or remitting the 6.625 percent sales tax collected on taxable goods and services. The operative words here are “willfully” and “intentionally,” which means you will likely be charged with a criminal offense. More specific examples of actions that constitute such criminal misconduct read as follows:
- Collecting sales tax from customers but failing to turn it over to the New Jersey Division of Taxation.
- Understating the amount of taxable sales made, or hiding, destroying, or altering your books and records.
- Falsely claiming tax-exempt status (i.e., using a charity’s or non-profit organization’s name).
- Using automated sales suppression devices to delete taxable transactions in your point-of-sale system.
Can I lose my professional or business license for tax fraud in New Jersey?
To reiterate, failing to pay sales tax may result in a tax fraud conviction, which is likely considered a third-degree crime in the state of New Jersey. Here, the criminal consequences may consist of three to five years of imprisonment and fines of up to $15,000. This may be in addition to civil penalties, such as a 50 percent penalty on the tax owed.
Not only this, but having tax fraud on your permanent criminal record may affect your professional and business licenses. This may be especially the case if you are a license holder in the accounting, contracting, healthcare, legal, or real estate industries. This is because there is the expectation that you will maintain good moral character and comply with state laws. So, this may become part of the Board’s separate disciplinary actions against you.
If you are being investigated by the state Division of Taxation or the federal Internal Revenue Service (IRS), you must act quickly. There is no shame in asking for help, especially when you are dealing with something as serious as a legal matter that could affect your physical, emotional, and financial well-being. So please retain legal assistance from a competent Morristown criminal defense lawyer from Graves Andrews, LLC. We will happily lend a hand.