Tax Fraud
In broad terms, tax fraud in New Mexico* consists of:
- Willfully and knowingly making a false tax return, statement or other document.
- Willfully assisting, procuring, advising, or counseling on the preparation or presentation of a false or fraudulent return or other tax document regardless of the knowledge or consent of the taxpayer or other person preparing the tax return
- Filing a false tax return electronically.
- Removing, concealing, or releasing a property which is to be levied for payment of taxes with the intent of evading taxes, or aiding or causing any of the above to occur.
Specifically, fraudulent income tax actions could include, but aren’t limited to:
- Failure to report cash income if you are paid in cash by your customers or employer (examples include: hairdressers, bartenders, wait staff, etc.)
- Intentionally reporting less income than you actually make
- Falsely claiming charitable deductions
- Taking incorrect or improper deductions for personal expenses
- Claiming false deductions on money held overseas
- Using a false Social Security number
- Claiming exemptions for a non-existent dependent
- Keeping two sets of financial ledgers for a business
- Falsification of documents such as receipts or checks
Tax Evasion
Income tax evasion is a serious type of fraud crime that includes any failure to thoroughly and properly report income owed to the government. Both individuals and businesses can be charged with income tax evasion.
The Difference between Tax Evasion and Tax Negligence
You might wonder if making a mistake on your Federal Income Tax return “counts” as tax evasion. Because the U.S. tax reporting system is complicated, sometimes mistakes occur when an individual files his or her tax return. Such errors are called tax negligence.
Federal Internal Revenue Service (IRS) auditors are trained to look for signs of fraud. They can usually determine if you are simply negligent in your tax return, or are willfully committing tax evasion.
Tax evasion is a very serious crime and is often considered a felony. Tax negligence happens by accident and is not as serious. However, even if you simply make an error in your return that results in money being owed to the IRS, the IRS may fine you a penalty of up to 20 percent of the amount you owe for tax negligence in addition to any repayment amount.
Penalties for Tax Fraud
In New Mexico, tax fraud can carry penalties of prison sentences, fines or both. The fines are collected in addition to repayment of any amount owed to the IRS. The penalties vary depending upon the amount of the tax owed*.
| Amount of Tax Owed | Crime Classification | Possible Time in Prison | Possible Fines |
| $250 or less | a petty misdemeanor | up to 6 months in prison | up to $500 |
| Over $250 but not more than $500 | a misdemeanor | up to 1 year in prison | up to $1,000 |
| Over $500 but not more than $2,500 | a fourth-degree felony | up to 18 months in prison | up to $5,000 |
| Over $2,500 but not more than $20,000 | a third-degree felony | up to 3 years in prison | up to $5,000 |
| Over $20,000 | a second-degree felony | up to 9 years in prison | up to $10,000 |
Penalties for Tax Evasion
Tax evasion in New Mexico is a felony punishable by up to 5 years in prison and up to $10,000 in fines. Federal penalties are even steeper. Upon conviction, an individual can face long prison terms, depending on the amount of money defrauded by the accused, be fined up to $250,000 and a corporation up to $500,000.
Get Help Today
Not sure where to turn next? If you have been charged with tax fraud or tax evasion in New Mexico, your best defense is a seasoned criminal defense attorney. As a former Federal and State prosecutor and current New Mexico Criminal Defense Attorney, Erlinda Ocampo Johnson has experience on both sides of state and federal court. Contact the law firm of Erlinda Ocampo Johnson, LLC. Ms. Johnson will dedicate herself to your case, fight for you and build an aggressive, effective case on your behalf.
*New Mexico Stat. Ann. 7-1-72, 7-7-73
