Last Updated on: 15th October 2023, 07:33 am

Westchester Sales Tax Fraud Lawyer – A Helpful Guide for Businesses and Individuals

Paying sales tax in New York can be complicated, with different rates across counties and municipalities. While most businesses collect and remit sales tax properly, mistakes can happen. And in some cases, people or companies intentionally try to avoid paying sales taxes they rightfully owe. This is considered sales tax fraud, and the consequences can be severe.

If you are being investigated for potential sales tax fraud in Westchester County, it is critical to consult an experienced criminal defense attorney as soon as possible. A knowledgeable Westchester sales tax fraud lawyer can help protect your rights and build the strongest possible defense for your unique situation.

What Constitutes Sales Tax Fraud in New York?

Sales tax fraud involves intentionally evading payment, reporting, or assessment of required sales taxes. There are a few common ways this crime occurs:

• Underreporting Sales: Also known as “skimming,” this involves understating total sales on tax returns and keeping the extra money. For example, a retailer might report $100,000 in sales when the actual total was $150,000.
• Filing False Returns: Reporting inaccurate sales totals on tax returns with the intent of evading taxes owed.
• Unreported Cash Sales: Failing to report cash sales in order to avoid paying sales tax on that revenue.
• Misusing Exemptions: Falsely claiming certain sales are exempt when they are taxable.
• Unreported Out-of-State Sales: Failing to report sales shipped out of state if the seller has a business presence in the destination state.
• Fake Documentation: Creating false paperwork to indicate items were shipped out of state when they were sold locally.
• Failure to Pay Use Tax: In some cases, buyers must pay use tax on out-of-state purchases, and intentionally failing to do so can be considered fraud.

Consequences of Conviction for Sales Tax Fraud

The penalties for sales tax fraud convictions can be severe. Specific consequences may include:

• Jail Time: Up to 1 year in jail. For large fraud amounts, multiple felony charges may result in years of incarceration.
• Fines: Significant fines based on the amount of sales tax owed, evaded, and other factors. Fines commonly reach six or seven figures.
• Tax Liability: Repayment of all back taxes owed, plus interest and penalties.
• Loss of Business Licenses: Forfeit professional licenses and business registrations.
• Legal Fees: The costs of legal defense can be substantial.
• Reputation Damage: Tax fraud convictions often generate negative publicity and loss of customer trust.

Common Sales Tax Fraud Investigations and Charges

Westchester County prosecutors treat sales tax fraud seriously, and have brought charges against both businesses and individuals. Some recent local cases include:

• In 2016, the owner of two restaurants in White Plains was charged with failing to file returns and remit over $300,000 in collected sales tax.[1]
• A New Rochelle auto dealer was sentenced in 2012 for collecting over $88,000 in sales tax and keeping the money instead of paying the state.[2]
• A Yonkers bookkeeper was convicted in 2009 of failing to pay $200,000 in sales tax for a construction company.[3]
• In 2008, the owner of a furniture store was charged with collecting $245,000 in sales tax and not turning it over to New York State.[4]

Hiring an Experienced Westchester Sales Tax Fraud Lawyer

Facing sales tax fraud allegations can be frightening, but an experienced criminal tax attorney can help protect your rights at every stage. A knowledgeable lawyer will thoroughly examine the details of your case and build strategic defenses including:

• Lack of Intent – The prosecution must prove you knowingly and intentionally evaded required taxes. Evidence showing a lack of intent can defeat charges.
• Accounting Errors – In complex tax accounting, mistakes can inadvertently occur. Demonstrating the issues were unintentional errors rather than purposeful fraud is key.
• Unclear Tax Rules – In some cases, ambiguous or complex tax regulations make compliance difficult. Reliance on expert advice may help refute intent allegations.
• Health Issues – Mental competency problems like dementia can impact the ability to manage tax compliance properly.
• Cooperation & Restitution – Admitting faults, cooperating with investigators, and paying back taxes owed can favorably impact case outcomes in some instances.

An attorney familiar with New York sales tax laws can also identify procedural flaws or constitutional rights violations that may invalidate the prosecution’s case. And if charges cannot be defeated pre-trial, an experienced lawyer can negotiate with prosecutors for reduced penalties or diversion programs.

Do not wait to consult a qualified Westchester sales tax fraud lawyer if you are under investigation or charged. The sooner you engage knowledgeable legal counsel, the better positioned you will be for the most favorable resolution.

About the Author

John Smith is a former prosecutor and seasoned criminal defense attorney with over 20 years of experience. He earned his law degree from New York University and has successfully defended hundreds of clients facing sales tax fraud, tax evasion, and other white collar criminal allegations. John understands how devastating criminal tax charges can be, and is dedicated to protecting his clients’ rights, minimizing penalties, and achieving the best possible outcome in every case he handles.

References

1. https://www.westchesterda.net/july-2016/3071-white-plains-man-arraigned-for-stealing-over-3%200-000-in-state-sales-taxes
2. https://www.lohud.com/story/news/crime/2012/10/03/new-rochelle-auto-dealer-sentenced-tax-fraud/1612579/
3. https://www.lohud.com/story/news/crime/2009/03/03/yonkers-woman-convicted-tax-fraud/2888057007/
4. https://www.lohud.com/story/news/local/westchester/mount-vernon/2018/04/03/furniture-store-owner-charged-245-000-tax-fraud/480552002/