Kentucky Tax Fraud and Tax Evasion Laws

Tax evasion occurs when a taxpayer intentionally either doesn’t pay, or underpays, taxes that he owes to the government. "Tax fraud" is a type of tax evasion where a taxpayer intentionally makes fraudulent statements on his tax return. It should be noted that these terms are often used interchangeably, however, tax fraud is technically a particular type of tax evasion.

Kentucky criminalizes tax fraud under the Uniform Civil Penalty Act. The following tables highlight this act as well as the statute that criminalizes fraudulent conveyances of property made in order to evade a tax.

Code Section

Kentucky Revised Statutes section 131.0101(10) & 131.180: Uniform Civil Penalty Act

What's Prohibited?

Tax fraud. Tax fraud is either:
  • An intentional or reckless disregard for the law, administrative regulations, or the Kentucky Department of Revenue's established policies in order to evade the filing of any return, report, or payment due, or
  • Deliberately filing false returns or reports with the intent to gain a monetary advantage

Penalties

If any tax assessed by the Kentucky Department of Revenue is the result of fraud then the offender will be fined a penalty of 50% of the tax owed.

Code Section

Kentucky Revised Statutes section 131.550: Fraudulent Conveyance Made in Order to Evade a Tax

What’s Prohibited?

Divesting yourself of any property (whether real, personal, tangible, or intangible) with the intent to evade the collection of any tax.

Intent

It should be noted that Kentucky's tax fraud and tax evasion laws only criminalize fraudulent acts that were done intentionally. The tax code can be very complicated and confusing, so it makes sense that an honest mistake isn't considered a fraudulent act in Kentucky. However, if it can be shown that an offender intended to illegally evade a tax then he can be prosecuted under the laws discussed in the table above.

Report Tax Fraud

Kentucky encourages anyone who knows or suspects that tax fraud is being committed to file a report. The Kentucky Department of Revenue allows reports of tax fraud to be made anonymously here. When filing a report it is important to provide as much helpful information (such as the offender's address and date ranges of the fraudulent activity) so that a tax investigation can be initiated.

Additional Resources

State laws change frequently. For case specific information regarding Kentucky’s tax fraud and tax evasion laws contact a local tax attorney.

Next Steps: Search for a Local Attorney

Contact a qualified attorney.