Tax evasion is the criminal offense of a person or entity using illegal methods to avoid paying the person or entity’s true tax liability. The Internal Revenue Code—a federal statute located in the United States Code—states that “[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.” 26 U.S.C. §7201.

Tax evasion is also a criminal offense under state law when a person or en,tity uses illegal methods to avoid paying state income, property, sales, franchise, payroll, and other taxes.

In New York, tax evasion is considered a serious criminal offense, both under federal and state law. Federally, as per the Internal Revenue Code (26 U.S.C. §7201), willfully attempting to evade or defeat any tax can result in felony charges, with penalties including fines up to $100,000 for individuals and $500,000 for corporations, imprisonment for up to 5 years, or both, along with the costs of prosecution. At the state level, New York tax law similarly criminalizes the willful evasion of state taxes, including income, property, sales, franchise, payroll, and other state-imposed taxes. Penalties for state tax evasion can include fines, imprisonment, or both, depending on the severity of the offense and the amount of tax owed. The New York State Department of Taxation and Finance is responsible for tax collection and enforcement, and works in conjunction with federal authorities to prosecute tax evasion cases.