New York Tax Law § 1802: Criminal Tax Fraud in the Fifth Degree

New York Tax Law § 1802 establishes the crime of criminal tax fraud in the fifth degree. This law applies to individuals and businesses that willfully and intentionally provide false information on their tax returns, withhold taxes or fail to remit taxes owed, or engage in other fraudulent behavior related to tax filings.

Under this law, a person commits criminal tax fraud in the fifth degree if they:

• Willfully and intentionally make, render, sign or verify any false statement in a tax return, report or other document required under the tax law of New York state or any municipality or political subdivision of New York.
• Willfully and intentionally fail to make a return, keep records, or supply information as required by the tax law of New York state or any municipality or political subdivision of New York.
• Willfully and intentionally fail to pay any tax, make any required withholding, or collect any tax that is due under the tax law of New York state or any municipality or political subdivision of New York.
• Willfully and intentionally evade or attempt to evade any tax or the payment of any tax due under the tax law of New York state or any municipality or political subdivision of New York.

Note that New York state also has four other degrees of criminal tax fraud, each with more severe penalties depending on the severity of the offense. Criminal tax fraud in the first degree, for example, is a Class B felony, which can carry a penalty of up to 25 years in prison and a fine of up to $100,000 or double the amount of the underpayment of tax, whichever is greater.

People v. Ransford, 140 A.D.3d 1404 (4th Dept. 2016). In People v. Ransford, the defendant was convicted of Criminal Tax Fraud in the Fifth Degree under New York Tax Law § 1802. The defendant operated a daycare center and failed to report all of her income on her tax returns. The prosecution presented evidence that the defendant concealed her true income by failing to deposit all of her cash receipts and by claiming personal expenses as business deductions. The defendant was sentenced to five years of probation and ordered to pay restitution to the State.

People v. Chirico, 173 A.D.3d 1655 (3d Dept. 2019). In People v. Chirico, the defendant was convicted of Criminal Tax Fraud in the Fifth Degree under New York Tax Law § 1802. The defendant operated a business selling and installing insulation, and failed to report all of his income on his tax returns. The prosecution presented evidence that the defendant concealed his true income by failing to deposit all of his cash receipts and by failing to report payments made to him by customers. On appeal, the court noted that the defendant's actions involved a deliberate attempt to evade taxes over a period of several years, and that the defendant had not shown remorse or taken responsibility for his actions. The court also noted that the defendant had prior convictions for similar offenses, which supported the imposition of a harsher sentence.

1. Criminal tax fraud in the fourth degree. Section 1803
2. Criminal tax fraud in the third degree. Section 1804
3. Criminal tax fraud in the second degree. Section 1805
4. Criminal tax fraud in the first degree. Section 1806

Criminal tax fraud in the fifth degree is a Class A misdemeanor, which can carry a penalty of up to one year in jail and a fine of up to $1,000. In addition, any person or business convicted of criminal tax fraud may also be required to pay restitution to the state of New York for any taxes that were fraudulently withheld or evaded.

A person commits criminal tax fraud in the fifth degree when he or she commits a tax fraud act.  Criminal tax fraud in the fifth degree is a class A misdemeanor.

If you are charged with Criminal Tax Fraud in the Fifth Degree under New York Tax Law § 1802, the first thing you should do is seek legal advice from an experienced criminal attorney serving New York who is knowledgeable about tax fraud cases. Contact Stephen Bilkis & Associates at 800.696.9529 to schedule a free, no obligation consultation regarding your case. We represent clients in the following locations: Manhattan, Nassau County, Queens, Bronx, Brooklyn, Long Island, Staten Island, Suffolk County, and Westchester County.