Over 1000 Clients Represented
You need an experienced attorney. John has tried more than a dozen cases to jury verdict as lead defense attorney. He knows what a good resolution of your case is, and more importantly what a bad resolution is.
“Mr. Crangle did a great job in handling my legal issue. Quick, polite, easy to work with, and affordable. Definitely would recommend!”
Vincent D“100% recommend John for any ongoing case. He got my case dismissed. Best criminal defense in the upstate.”
Johnathan MUnderstanding Tax Fraud and Tax Evasion in South Carolina
South Carolina’s criminal tax statutes are found primarily in S.C. Code § 12-54-44, which sets out criminal penalties for violations of the state’s tax laws administered by the South Carolina Department of Revenue (SCDOR).
Tax evasion under § 12-54-44(B)(1) occurs when a person willfully attempts to evade or defeat a tax or its payment administered by the SCDOR. This includes falsifying income, concealing assets, underreporting revenue, and other schemes to reduce tax liability below what is actually owed. Willfulness is the critical element, distinguishing it from honest mistakes or good-faith disputes. Understanding the nuances of what constitutes willfulness under state law is vital for mounting an effective defense.
Section § 12-54-44(B)(6)(a) criminalizes willfully making and subscribing a return, statement, or document declared under penalties of perjury without believing it to be true and correct. This “false return” provision applies to state income tax, sales tax, payroll tax, and other returns filed with the SCDOR.
Willfully failing to collect, truthfully account for, and pay over any tax under § 12-54-44(B)(2) is another felony. This often applies to employers who withhold payroll taxes from employees but don’t remit those funds to the state.
Misdemeanor provisions cover lesser violations, including willfully failing to file required returns, failing to keep required records, or delivering fraudulent documents. Each can result in fines and jail terms.
At the federal level, tax evasion is prosecuted under 26 U.S.C. § 7201 (tax evasion), § 7206 (filing a false return), and § 7203 (failure to file). Federal cases often arise from IRS Criminal Investigation (IRS-CI) investigations, independent of state proceedings. Navigating the interplay between state and federal jurisdictions can be a formidable challenge.
Penalties for Tax Fraud and Tax Evasion in Greenville, SC
Under S.C. Code § 12-54-44, penalties vary by specific offense.
Willful tax evasion or willful failure to collect and pay over taxes is a felony. A conviction may result in a fine up to $10,000, imprisonment up to five years, and the cost of prosecution. South Carolina courts also consider restitution as part of sentencing, which means repayment of all back taxes owed.
Willfully filing a false return is also a felony, with fines up to $500 and imprisonment up to five years, plus prosecution costs. If the convicted person is banned from preparing tax returns (an additional provision in § 12-54-44(B)(6)(b)), violating that ban carries a $10,000 fine and at least five years in prison, with no probation or parole.
Misdemeanor tax violations carry fines up to $10,000 and imprisonment up to one year.
In all criminal tax cases, courts typically order the payment of back taxes owed, plus interest and civil penalties, in addition to any criminal fine. The civil fraud penalty under § 12-54-43 adds 75% of the underpayment attributable to fraud on top of the underlying tax liability.
For federal tax crimes, the stakes are higher. Federal tax evasion under § 7201 can lead to up to five years in federal prison and fines up to $250,000. Federal false returns under § 7206 carry up to three years per count. Federal sentences are served without parole under current guidelines. The federal system’s lack of parole underscores the need for a strong defense strategy.
Prosecuting Tax Fraud Cases in Greenville County
State tax fraud investigations in South Carolina typically start with the SCDOR’s Office of Investigations or are referred to SLED. For state-level felony prosecutions, cases go to the 13th Judicial Circuit Solicitor’s Office for prosecution in General Sessions Court in Greenville County.
Investigations often begin with an audit revealing discrepancies. Underreported income, unsubstantiated expenses, deposits not matching reported revenue, and mismatches between filed returns and third-party information (e.g., W-2s, 1099s) are common triggers. Once fraud is suspected, it transforms into a criminal investigation.
Federal tax fraud investigations are led by IRS-CI, sometimes with other federal agencies. These can last two to three years before charges. Investigators conduct detailed financial analyses, subpoena bank records, interview third parties, and build timelines of income and expenditures. The protracted nature of these investigations often requires a patient and strategic approach.
Tax fraud charges often coincide with other financial crimes. Fraud by false pretenses, Embezzlement of business funds, Money Laundering, and Wire Fraud often accompany tax crimes.
Cash-intensive businesses, self-employed individuals, real estate investors, and business owners are frequently targeted because their financial reporting affords more discretion and opportunity for errors or manipulation.
Defense Strategies for Tax Fraud
Tax fraud defenses focus on willfulness. The government must prove that you knew you had a legal obligation and consciously chose to violate it.
Good faith reliance on professional advice is a strong defense. If you relied on the advice of a qualified accountant or tax attorney when preparing your returns, that reliance can negate willfulness, even if the returns were incorrect. The advice must have been given in good faith, with all relevant facts disclosed, and you must have genuinely relied on it.
Tax law complexity is another relevant factor. Courts recognize that failing to comply with a provision you didn’t know about isn’t the same as deliberate evasion. This defense doesn’t excuse deliberate misrepresentation but can be effective for technical violations.
Challenging the government’s financial analysis is crucial in cases built on complex income reconstruction. Government professionals may use net worth analysis, bank deposit analysis, or other methods prone to error that a defense forensic accountant can identify.
Statute of limitations defenses may apply. The standard limitation period for federal tax crimes is six years from the date the return is filed. State limitations periods also apply, though fraud can toll the clock. Understanding these timelines is essential to developing a comprehensive defense strategy.
Distinguishing civil tax disputes from criminal conduct is sometimes the most strategic choice. Many tax controversies are civil matters that should be resolved with the IRS or SCDOR through audits and appeals, not criminal proceedings. Separating civil and criminal tracks ensures civil resolution doesn’t prejudice the criminal defense.
Why You Need a Tax Fraud Lawyer in Greenville
Tax fraud cases are among the most technically demanding in criminal defense. They require fluency in tax law, forensic accounting, and criminal procedure. The federal overlay, with IRS-CI investigations resulting in federal prosecution, makes early attorney involvement crucial.
A conviction at either level not only means fines and prison but the permanent loss of professional licenses, the inability to work in finance or accounting, federal firearms restrictions, and a fraud record that impacts every aspect of life. The consequences extend beyond legal penalties, affecting your personal and professional future.
John Crangle, a Greenville Criminal Defense Lawyer, defends clients charged with tax fraud, tax evasion, and related white collar offenses throughout Greenville County and the 13th Judicial Circuit. He collaborates with financial professionals to challenge the government’s case, attacks evidence sufficiency, and builds defenses grounded in the specific facts of your situation.
Whether you’re facing a state SCDOR investigation, an IRS-CI inquiry, or charges already filed in state or federal court, John Crangle can assist. For related allegations involving Credit Card Fraud or Forgery / Counterfeiting, these charges can be addressed as part of a comprehensive defense strategy.
Contact John Crangle today for a confidential consultation about your tax fraud case in Greenville.