State of North Carolina Penalties for Income Tax Evasion
No one likes paying income taxes, but most states require you to pay a portion of your income to them in addition to the taxes you already pay to the federal government--and North Carolina is one of them. If you are considering ducking your tax obligations either by fraud or by just not paying, you should also consider North Carolina's penalties for tax evasion.
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Individual Taxpayers
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If you pay less than your legally-required amount of taxes while intending to evade your tax obligations, you will run afoul of North Carolina General Statutes Chapter 105-236(a). Part (6) of this subsection directs the North Carolina Secretary of Revenue to add a 50 percent penalty to the amount of taxes you have evaded.
You will also be guilty of a Class H felony, which carries with it a minimum penalty of a fine and restitution, four to eight months probation, or four to eight months in prison, depending on the circumstances. For a second or subsequent offense, probation or prison are the only options and the required length of your term will increase to a maximum of two years in prison.
Aiding Evasion
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Even if you have paid your own taxes in full, you will still be guilty of a Class H felony if you "aid or abet" another North Carolina resident in evading his or her taxes, according to North Carolina's General Statutes 105-236(a)(7). The penalties are the same as for someone who evades his or her own taxes: fine/restitution, short probation or jail term for the first offense, moving up to two years in prison after several subsequent offenses.
Tax Preparers (Minor)
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If you are a tax preparer and help a tax payer evade a tax obligation of less than $100,000 during a tax year, you will be guilty of a Class F felony, according to North Carolina General Statutes 105.236(a)(9a). The penalties for this offense are considerably stiffer than those for a Class H felony: for the first offense, you will receive a probation or prison term of not less than 13 months (assuming there are no mitigating or aggravating circumstances, which could reduce the term to 10 months or boost it to 20 months, respectively). For subsequent offenses, the mandatory terms increase up to a maximum of 41 months in prison.
Tax Preparers (Major)
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If you are a tax preparer and help a tax payer evade a tax obligation of $100,000 or more, you will be guilty of a Class C felony under North Carolina General Statutes 105.236(a)(9a). This crime has no option for parole and committing it once will land you in prison for at least 58 months under normal circumstances. If you commit this crime multiple times, you could end up in prison for more than 15 years.
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