North Carolina Tax Fraud Defense Strategies in 2025

By W. James Payne Law Firm

Tax fraud is a very serious allegation that can result in significant legal penalties that you might not be ready to fully accept. You could face serious jail time, enormous fines, and lifelong probation depending on the seriousness of the charges. The very first thing you should do when charged with tax fraud is reach out to an experienced tax fraud lawyer. Your lawyer can help you make a plan and implement some North Carolina tax fraud defense strategies into your case.

What Is Tax Fraud in North Carolina?

Tax fraud occurs when an individual or business entity intentionally misrepresents themselves or falsifies information on their tax return to limit their liability. Ultimately, it is done to avoid paying their federal tax obligation. Many different behaviors may be considered tax fraud, such as claiming false deductions, not reporting income, or simply refusing to pay their taxes in any way, which is known as tax evasion.

North Carolina’s Department of Revenue investigates cases of tax fraud in the state, as many people may also have to file a state tax return on top of their federal tax return. Tax fraud is considered a major crime that could be punished severely. There were 1,373 tax fraud IRS investigations in 2023 and 615 sentenced cases.

If you are accused of tax fraud, it is vital that you reach out to an experienced tax fraud lawyer immediately and start working on a sound defense strategy. Otherwise, you could end up convicted and serve serious prison time.

Potential Defenses Against Tax Fraud

When you are charged with tax fraud, you may not immediately know you have options to challenge those charges. It’s understandable, especially if you have never been in this situation before, to be unaware of your rights and options. That’s why you should see a tax fraud lawyer as soon as you can. Your lawyer will inform you of the most effective defense strategies for your case and help you build a defense. Here are some of the potential defense strategies you might use:

• Lack of intent. In order to secure a conviction on tax fraud charges, the prosecution has to be able to prove your guilt beyond a reasonable doubt. Securing reasonable doubt may not be as easy as they think, especially if your lawyer is able to prove a total lack of intent on your part. Your lawyer may argue that while you didn’t pay your taxes, it wasn’t on purpose. You didn’t intend to defraud the government. It was an honest mistake.It may be possible to prove that you were misled by a tax professional, misinterpreted the tax laws, or simply made a mistake with no intent to cause harm or trouble. By declaring a lack of intent, your lawyer may be able to dismantle the prosecution’s argument, as a lack of intent introduces reasonable doubt into the case
• Good faith. Another possible defense strategy you could utilize is evidence that you acted in good faith. If you relied on the advice of a tax professional, such as an accountant, your lawyer may be able to argue that your actions were based on that advice and were made in good faith. You didn’t know you were getting bad advice and acting illegally.Additional evidence that supports a lack of intent or a good faith argument may include documentation that you made the effort to comply with state and federal tax laws or voluntarily corrected your errors once you realized you had made a mistake. An experienced bank fraud lawyer can help you explain this.

FAQs

What Are Defenses to Tax Fraud?

In North Carolina, there are many different possible defenses against tax fraud charges. Whether or not you will be able to use them depends entirely on the details of your case. A total lack of intent may be one way to avoid penalties, as it introduces reasonable doubt into the prosecution’s case and demonstrates that you never meant to cause trouble. You simply didn’t know what you were doing. Additional defenses may include insufficient evidence, illegal search and seizure, and entrapment.

What Is the Burden of Proof for Tax Fraud?

The burden of proof for a tax fraud case lies with the government since they are the ones accusing you of tax fraud. It is up to the prosecution to prove your guilt beyond a reasonable doubt, which is not always easy to accomplish, especially in tax fraud cases. If your lawyer is able to build you a strong defense strategy built on a foundation of lack of intent or good faith, you may have a strong chance of beating the charges.

How Do You Resolve Tax Fraud?

If you suspect that you are going to be charged with tax fraud, the most effective thing you can do is hire a lawyer. Your lawyer can look through your case and determine an appropriate course of action moving forward. They may advise you to report the potential fraud yourself and get ahead of the charges, which may help in making you look more favorable in a court of law. If you suspect someone is taking advantage of you through your taxes, report it to the IRS.

Do I Need a Lawyer for a Tax Fraud Case?

Yes, it is highly recommended that you hire a lawyer to represent you in a tax fraud case. Tax fraud is a very serious allegation that could have lasting repercussions on your life. The last thing you want is to be caught unprepared as you go up against a seasoned prosecutor without solid legal help. A lawyer can help you build a defense and represent your interests.

Reach Out to an Experienced Tax Fraud Lawyer Today

Dealing with a tax fraud case on your own can be overwhelming and difficult to handle. The stakes may be too high for you to risk losing. A good lawyer can help you put together a solid defense strategy and will work tirelessly to help you fight the charges being made against you.

The legal team at the W. James Payne Law Firm understands the various defense strategies that can be used in a tax fraud case. Contact us to speak to a valued team member about a potential consultation.