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Is it Always a Grand Larceny Crime to Fraudulently Request and Receive Tax Refunds: Understanding Criminal Tax Fraud and Grand Larceny

From corporate enterprises and families to small businesses to the New York State government, budgets always seem to get tighter and tighter. By no means an excuse to commit a crime of deceit or fraud, it is far from atypical to hear of investigations and arrests involving Criminal Tax Fraud as set for New York State Tax Law Article 1800. With penalties in terms of dollars and prison looming overhead, what may be a simple mistake has the potential to devolve into a felony with crippling consequences. Whether through a criminal lawyer versed in tax crimes and laws or on your own, to best prevent yourself from running afoul of any of these statutes, and particularly a “tax fraud act” defined in New York State Tax Law 1801, knowledge is key. Serving only as a cursory analysis of the various criminal offenses associated with failing to remit, providing materially false or fraudulent information on a return, evading taxes and other misconduct, this entry will briefly address when Criminal Tax Fraud is also violates the Grand Larceny statute found in Article 155 of the New York Penal Law.

While a non-attorney may not appreciate the difference between two types of thefts, you do not have that luxury if you are subject to investigation, arrest or indictment by one or a combination of the New York State Attorney General, a District Attorney’s Office and New York State Tax Department. For example, if you are arrested for committing a “tax fraud act” during a period not to exceed one year and the value of the evaded tax is more than $3,000.00, but no greater than $10,000.00, the felony offense you would likely face is Fourth Degree Criminal Tax Fraud pursuant to Tax Law 1803. A class “E” felony, a conviction for this crime can land you in prison for up to four years. Alternatively, if the dollar amount allegedly evaded is north of $10,000.00 but not more than $50,000.00, then felony rises to the class “D” crime of Third Degree Criminal Tax Fraud, New York Tax Law 1804. As unnerving as all this may be, if prosecutors can prove you committed a Grand Larceny crime, then things can get potentially worse.

Briefly, whenever you steal property valued more than $3,000.00 but topping off at $50,000.00, the chargeable offense is Third Degree Grand Larceny, a class “D” felony. This type of felony has a penalty of up to seven years in prison. What happens, however, if you “merely” commit a “tax fraud act” between $3,000.00 and $10,000.00. If prosecutors can only prove a violation of section 1803, and not a Grand Larceny, then you would only face a maximum exposure of four years in prison (“only” being a relative term) for the tax offense. However, if prosecutors can also prove beyond a reasonable doubt that you had a “larcenous intent,” then, as reflected in People v. Nelson, 38 A.D.3d 472 (Fist Department 2007), then a judge or jury can find you guilty of both the lesser tax crime and greater theft offense. Obviously, “larcenous intent” in conjunction with a “tax fraud act” can mean as much as up to three more years in prison.

It is worth noting that Nelson did not receive a refund check from the State of New York and instead benefited with tax credits that could be allocated to other personal tax liabilities. Simply, its of no consequence how that benefit was received in terms of “payment” as long as prosecutors can establish the amount and “tax fraud act.”

To better understand both the crime of Criminal Tax Fraud in New York and Grand Larceny, review the provided links.

Crotty Saland PC is a New York criminal defense firm versed and experienced in Criminal Tax Fraud prosecutions throughout New York City and the greater Hudson Valley area. Both founding attorneys served as prosecutors in the Manhattan District Attorney’s Office prior to establishing the law practice.

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