Tax fraud or tax evasion is a form of white collar crime that’s prohibited in Maryland. Typically, tax evasion occurs by intentionally not paying or underpaying your taxes. For example, a person who intentionally completes a tax forms inaccurately in order to owe less in taxes to the state has committed tax fraud.
Who Enforces Tax Fraud Laws in Maryland?
The Comptroller of Maryland collects taxes for the state. If an individual taxpayer doesn’t pay his or her taxes, the comptroller can enforce tax compliance.
Maryland Tax Fraud and Tax Evasion Laws: Statutes
The following table outlines some of the main individual tax fraud laws in Maryland.
||Maryland General Tax Code, Sections 13-703: False Returns, 13-704: Fraudulent Failure to File Return, 13-705: Frivolous Income Tax Return, 13-716: Estate Tax Underpayment Penalty, 13-1001: Willful Failure to File Return, 13-1002: Willfully Filing False Return, 13-1024: Willful Failure to Provide Information
Maryland Property Tax Code, Sections 14-1002: Willful Failure to Provide Information, 14-1004: Willfully Providing False Information or Answer, 14-1006: Willful Failure to Submit Property Tax Report, 14-1009: Willful Failure to Answer Interrogatory, and 14-1012: Misrepresenting Consideration on Recorded Instrument
|Prohibitions and Penalties
A sample of the Maryland tax evasion laws that effect consumers and their penalties include:
- False Returns – If a person with the intent to evade tax payment files a false tax return, a penalty of up to 100% of the underpaid taxes will be assessed.
- Fraudulent Failure to File Return – If a person fails to file a tax return to evade paying taxes, a penalty of up to 100% of the unpaid taxes will be added to his or her bill.
- Frivolous Income Tax Return – If a person files an income tax return that contains facially substantially incorrect information and the conduct is due to the persons desire to delay or impede tax collection, or is frivolous due to a position that has no basis in law (think the Wesley Snipes tax evasion scandal), then the person will be fined $500.
- Estate Tax Underpayment Penalty – If a person substantially understates an estate tax valuation that results in a substantial underpayment (60% or less of correct amount), then the comptroller can assess a penalty of 25% of the amount of the underpayment (if underpayment was $5,000 or more).
- Willful Failure to File Return - A person who’s required to file an income tax return and willfully fails to is guilty of a misdemeanor that can be penalized by up to 5 years in prison and a $10,000 fine.
- Willfully Filing False Return – A person who willfully files a false income tax return (or other types of tax returns) is guilty of perjury and, if convicted, can be penalized by up to 10 years in prison.
- Willful Failure to Provide Information – If a person fails to provide required information or provides false or misleading information to evade paying taxes, he or she has committed a misdemeanor subject to 18 months imprisonment and at most $5,000 fine. The person could also be charged with perjury.
The following property tax evasion laws can be punished by up to 18 months imprisonment, a $5,000 fine, and prosecution for perjury is also possible.
- Willful Failure to Provide Information – Failing to provide any required information to evade paying taxes
- Willfully Providing False Information – Providing false information or answers to a property tax interrogatory
- Willful Failure to Submit Property Tax Report – Failing to submit a property tax report to evade paying property taxes
- Willful Failure to Answer Interrogatory – Failing to answer an interrogatory to evade taxes
Additionally, misrepresenting how much was paid by showing written evidence of a greater or lesser recordation tax (tax for recording an instrument with land records like a deed or conveyance) paid than required, can be punished by up to 6 months in jail and a fine up to $500.
Note: In Maryland, felonies and misdemeanors that can be punished by imprisonment can usually be prosecuted at any time, thus a crime you committed long ago can come back to haunt you.
|Time Limits to Collect Back Taxes
Typically, the tax collector must assess taxes (including income and estate taxes) within three years of the date it’s filed or due. However, if a person was intentionally evading taxes or filed an incomplete return, the assessment can be made at any time. That is, there’s no statute of limitations, or law limiting the time for collection.
Note: State laws change constantly, it’s important to verify the accuracy of these laws by conducting your own legal research or consulting with a qualified Maryland tax attorney or criminal defense attorney.
Maryland Tax Fraud and Tax Evasion Laws: Related Resources
Get Legal Help with Your Maryland Tax Fraud/Evasion Case
Tax evasion and tax fraud are very serious charges that can lead to steep fines and lengthy prison sentences. If you've been charged with either crime, or are currently under audit, it's in your best interests to get in touch with a local tax attorney to discuss your situation and received personalized legal advice.