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Michigan Tax Evasion and Fraud Laws

In Michigan, tax fraud and tax evasion are serious crimes that carry steep penalties and repercussions. These crimes generally all fall under one of two categories: crimes related to the filing of the return and crimes related to the failure to file a return.

Tax fraud occurs when an individual or business entity willfully and intentionally falsifies information on a tax return in order to limit the amount of tax liability. Tax fraud essentially entails cheating on a tax return in an attempt to avoid paying the entire tax obligation. Examples of tax fraud include claiming false deductions, claiming personal expenses as business expenses, and not reporting income.

Income tax evasion occurs when a person does not file a tax return when they are required to in order for their tax filings to be complete and accurate.

Penalties for both crime can be civil and criminal. State and federal governments aggressively use the criminal law to enforce tax violations.In addition to state law penalties, individuals committing tax fraud can also be investigated by the Internal Revenue Service (IRS).

The following table highlights the main provisions of Michigan's Tax Fraud and Tax Evasion laws.

See also Financial Crimes,White Collar Crimes, Forgery, Embezzlement, and Fraud.

Code Section

Michigan Income Tax Act of 1967, Chapter 205 et seq.

What is Prohibited Purposefully failing to file any required tax report or return; or filing a false/misleading document in connection with any tax return, audit or investigation or failing to supply the correct information in a timely manner. Also, intentionally evading any tax or failing to pay a tax or claiming a false exemption.
Penalties Criminal (Felony or Misdemeanor) and Civil Penalties
Tax Fraud and Possible Associated Crimes Tax fraud, tax evasion, forgery, falsifying business records,offering a false instrument for filing, grand larceny, and possession of stolen property.

Whistleblower Laws

Federal Internal Revue Service Whistleblower Law: Allows people to bring lawsuits against individuals and companies whom they believe committed fraud against the government.

Common Types of Tax Fraud/Tax Evasion

  • Underreporting income;
  • Overestimating expenses or deductions;
  • Failing to collect employment taxes;
  • Making false statements to investigators;
  • Violating employer withholding requirements; and
  • Not filing a yearly tax return.

Enforcement Agencies

If you want to report tax fraud or tax evasion, here is some contact information that may help:

Charged with Tax Fraud/Evasion in Michigan? Contact an Attorney

Conviction under Michigan's tax evasion and tax fraud laws will result in criminal and/or civil penalties. If you've been charged with either tax fraud or tax evasion in Michigan, or if you're under audit and believe such charges may be filed, it's a really good idea to speak with a local tax attorney.

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