Taxpayers who intentionally avoid paying their share of taxes commit the crime of tax evasion and are punished with stiff fines and even prison sentences. Every state has tax evasion and fraud laws that specific how harshly offenders will be punished within the state.
Some states, such as Maine, define tax evasion very broadly to include any intentional act done in order to avoid paying a tax that is owed. The table below outlines Maine's primarily tax fraud and tax evasion law.
|Maine Revised Statutes section 184-A: Intentional Evasion of Tax|
Intentionally attempting in any manner to evade or defeat any tax or the payment of an assessed tax.
Tax amount of $2,000 or less: Class D crime punishable by imprisonment for up to one year, and/or a fine of up to $2,000.
Tax amount of more than $2,000: Class C crime punishable by imprisonment for up to five years, and/or a fine of up to $5,000.
Additionally, an offender may also be required to pay a penalty in the amount of 75% of the portion of the underpayment (in addition to the tax that was originally owed).
Negligence vs. Fraud
Tax codes can be incredibly complicated, and from time to time even the most diligent taxpayer can make honest mistakes. But not to worry, honest mistakes don't constitute tax fraud or tax evasion. In Maine, tax evasion can only be committed if the offender intended to evade or defeat a tax.
In other words, a taxpayer's negligent acts that lead to underpayment of taxes doesn't count as tax fraud because the acts weren't done intentionally. However, a tax underpayment that is attributable to negligence, or an intentional disregard of the law, but that isn't attributable to fraud with intent to evade the tax, can result in a penalty in the amount of 25% of the underpayment (in addition to the tax that was originally owed).
Contact a qualified attorney.