Defending Against Failure to File Tax Returns Charges in California
Defending Against Failure to File Tax Returns Charges in California
Dealing with failure to file tax return charges can be scary. But there are defenses you can use to fight the charges. This article explains the common penalties for not filing returns in California, and legal defenses you can use.
Penalties for Failing to File Tax Returns in California
Not filing your tax returns on time can lead to both civil and criminal penalties in California. Here are some of the most common ones:
- A penalty of 5% of the unpaid tax for each month the return is late, up to 25% maximum. This applies if you don’t file your return or pay your taxes by the due date[4].
- A penalty of $135 if your tax due is $540 or less[4].
- A penalty of $540 if your tax due is over $540[4].
- A penalty of up to $25,000 for each year you failed to file a return[5].
- Up to 1 year in county jail or state prison[1][2].
- Fines of up to $20,000[1].
- Having to pay back taxes plus interest[1].
- A tax lien placed on your property until you pay the taxes[1].
- Seizure of property if you don’t pay the taxes[1].
As you can see, the penalties quickly add up. The state takes failure to file very seriously. But don’t panic – read on to learn about defenses you can use.
Statute of Limitations Defense
One defense is the statute of limitations. This limits how long after an alleged crime that the state can file charges. For failure to file returns in California, the statute of limitations is 6 years[5].
So if it’s been more than 6 years since you failed to file the return, the state cannot prosecute you. The clock starts running from the original due date of the return. This defense can prevent criminal charges, but you’d still owe back taxes and interest.
No Willfulness Defense
To convict you of criminal tax evasion under California Revenue and Taxation Code Section 19706, the state must prove you “willfully” failed to file the return[2][3]. Willfully means you knew you had to file but intentionally didn’t.
If you can show you did not act willfully – for example you were sick, or did not realize you had to file – then you should not be convicted. Lack of willfulness is a strong defense against criminal charges.
Reliance on Tax Preparer Defense
Another defense is if you relied on a tax preparer or accountant to file your returns. If they failed to do so properly, you may not be liable. To use this defense, you must show[3]:
- You provided the preparer all relevant tax information.
- You had no reason to believe the preparer was incompetent.
- You believed in good faith that the preparer properly filed the returns.
If you can prove all this, you may avoid criminal liability for failure to file the returns.
Incorrect Filing Status Defense
Sometimes the IRS or California Franchise Tax Board (FTB) claim you failed to file returns. But it turns out you did file – just under the wrong status. For example, they think you filed as “single” when you should have filed as “married filing jointly.”
If you can show you filed a return but used the wrong status, you may avoid penalties. You still have to correct the status and pay any additional taxes. But this defense can help avoid jail time and larger fines.
File Immediately Defense
If you failed to file returns, one of the best defenses is to file them immediately. File all the missing returns as soon as you learn about the problem. Pay any taxes you owe too. This shows good faith and can persuade the prosecutor to drop the charges.
File the returns even if you use one of the above defenses. It puts you in the best position to avoid criminal liability and penalties.
Get Legal Help Defending Failure to File Charges
Dealing with failure to file charges is scary. But with the right defense, you can avoid jail time and the harshest penalties. Speak to a California tax attorney right away if you face these charges.
A skilled lawyer will evaluate your case and defenses. They can also negotiate with the prosecutor to reduce charges. In many cases they can get the charges dropped entirely. Don’t go it alone against the powerful IRS or California FTB. Get an experienced tax attorney on your side.
With the help of a tax lawyer, you can put this failure to file issue behind you. Then you can focus on properly filing your returns going forward. Don’t wait – contact a qualified attorney today.
References
[1] Tax Evasion Charges in California – What You NEED to Know
[2] How Long Do You Go to Jail for Tax Evasion in California? | Simmrin Law Group
[3] Tax Evasion Defense Attorney in California | Eisner Gorin LLP
[4] Common penalties and fees | FTB.ca.gov
[5] Tax Evasion Penalties Guide & Tax Fraud Jail Time Sentences – Brotman Law