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Tennessee Tax Fraud and Tax Evasion Laws

Tax fraud or tax evasion is intentionally not paying or underpaying your taxes. One way tax fraud occurs is filling out tax forms inaccurately to owe less to the state. Tax fraud is a form of white collar crime.

The Tennessee Department of Revenue is responsible for collecting taxes in Tennessee. If a resident fails to pay their required taxes or purposefully underpays, the Department of Revenue can seek prosecution for tax fraud. Tennessee permits residents to anonymously report tax fraud online or by calling 1-800-FRAUDTX or 1-800-372-8389.

Tennessee Tax Fraud and Tax Evasion Laws: Statutes

The main provisions of the Tennessee tax fraud and tax evasion laws are outlined below.

Code Sections

Tennessee Code Title 67: Taxes and Licenses contains tax laws for income, property, sales, transfer, gas, and other taxes, including some of the penalties for evading taxes.

Tennessee Department of Revenue Rules containing the administrative rules for tax collecting.

What's Prohibited?

Tax evaders can be penalized criminally and civilly. Taxpayers who fraudulently avoid paying their taxes typically owe both the unpaid taxes as well and the cost to investigate and prosecute the fraud.

Tennessee Code Section 67-2-121 makes it a Class C misdemeanor crime to:

  • Fail to file a tax return (when required, some people are exempt, such as seniors over 65 with less than $26,200 or $37,000 for a couple)
  • Violate any tax regulation
  • For any corporation to fail to give the Department of Revenue a list of stockholders paid dividends

Also, making a false return with the intent to avoid a tax is a Class E felony.

Penalty Jail and Fine Schedule

In Tennessee, punishment for felonies and misdemeanors vary by class. The sentencing ranges for the tax fraud crimes listed above are:

  • Class E Felony - 1-6 years in prison and a fine up to $3,000
  • Class C Misdemeanor - up to 30 days in jail and a $50 fine

Time Limits to Collect Back Taxes

Typically, crimes must be prosecuted or fees must be collected within a specific time period, called the statute of limitations. The Department of Revenue usually has within three years to assess taxes on filed returns or five years to issue a notice of deficiency for taxes to the taxpayer. However, these statute of limitations don't apply to fraudulent tax returns or failure to file a return. That means, you could still owe the taxes many years after the fraud occurred.

Note: State laws change frequently -- it's important to verify the state laws that you're researching.

Research the Law

Indiana Tax Fraud and Tax Evasion Laws: Related Resources

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