Colorado Tax Fraud and Tax Evasion Laws

Death and taxes. We’re all aware of the famous certainties in life, but we might not be aware of how the taxation side is enforced. Here in the Rocky Mountain State, tax evasion and fraud could be punished by jail time and six-figure fines. The penalties for filing or paying your taxes late are less severe, but can increase the later you are.

In Colorado, the Department of Revenue's Taxation Division is in charge of tax filing, refunds, and enforcement in the state. For any suspected violation of the state’s tax laws, the DOR can initiate criminal investigations , and has forms that allow citizens to report suspected tax evaders.

Tax Evasion and Fraud Statutes in Colorado

The following table outlines Colorado’s tax evasion and fraud laws.

Code Section

COL. REV. STAT. §39-22-101, et seq.

Penalties and Interest for Unpaid Taxes

COL. REV. STAT. §39-22-621
The penalty for late filing or payment of income tax is based on the amount of tax due. The delinquent payment penalty is the greater of $5 or 5% for the first month or fraction thereof, plus ½% each additional month or fraction thereof, not to exceed 12%:

  • 04/16 – 05/15 5%
  • 05/16 – 06/15 5.5%
  • 06/16 – 07/15 6%
  • 07/16 – 08/15 6.5%
  • 08/16 – 09/15 7%
  • 09/16 – 10/15 7.5%
  • 10/16 – 11/15 8%
  • 11/16 – 12/15 8.5%
  • 12/16 – 01/15 9%
  • 01/16 – 02/15 9.5%
  • 02/16 – 03/15 10%
  • 03/16 – 04/15 10.5%
  • 04/16 – 05/15 11%
  • 05/16 – 06/15 11.5%
  • 06/16 – 07/15 12%

Generally if you do not owe money with your return, there is no penalty even if the return is filed late.

Penalties for Fraud and Evasion

COL. REV. STAT. §39-21-118

Willful attempt to evade or defeat any tax is a class 5 felony and shall be punished by a fine up to $100,000 for an individual or $500,00 for a corporation, or by both such fine and up to 3 years imprisonment, together with the costs of prosecution.

Willful failure to collect or truthfully account for or pay over any tax, including, willfully making a materially false statement in connection with an application for a refund of any tax for the purpose of falsely obtaining a refund of such tax is a class 5 felony and shall be punished by a fine up to $100,000 for an individual or $500,00 for a corporation, or by both such fine and up to 3 years imprisonment, together with the costs of prosecution.

Gross negligence or recklessness in making a materially false statement in applying for a refund is a misdemeanor and shall be punished by a fine of up to $500, or by up to 90 days imprisonment or by both.

Willful aid or assistance in preparation of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter is a class 5 felony and shall be punished by a fine up to $100,000 for an individual or $500,00 for a corporation, or by both such fine and up to 3 years imprisonment, together with the costs of prosecution.

Right to Appeal?

Yes

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Related Resources

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