What Are the Penalties for Tax Evasion in Georgia

February 12, 2025 • Posted In White Collar Crime

Tax evasion is considered a serious white collar crime in Georgia, carrying both civil and criminal penalties. Individuals and businesses caught attempting to evade taxes could face steep fines, asset forfeiture, and even prison time. Understanding the penalties associated with a tax evasion conviction can help you determine the best course of action if you are facing an investigation.

How Georgia Law Defines Tax Evasion

Tax evasion occurs when an individual or business intentionally avoids paying state taxes by underreporting income, falsifying deductions, or failing to file required tax returns. Under Georgia Code § 48-1-6, tax evasion is a criminal offense that can result in severe financial penalties and imprisonment. The state aggressively pursues individuals suspected of fraudulent tax activities or other white collar crimes, often working alongside federal agencies.

Civil tax evasion involves non-payment of taxes due to errors, negligence, or unintentional omissions. In these cases, the Georgia Department of Revenue may impose financial penalties but does not pursue criminal charges. Criminal tax evasion, on the other hand, involves deliberate actions to defraud the state, leading to felony charges and the possibility of prison time.

Fines and Financial Penalties for Tax Evasion in Georgia

If you are convicted of tax evasion, you may be required to pay substantial fines in addition to the unpaid taxes. Georgia law imposes financial penalties based on the severity of the offense and the amount of tax owed. The following fines and penalties may apply in a tax evasion case:

• Fines based on unpaid taxes – Individuals found guilty of tax evasion may face fines ranging from thousands to tens of thousands of dollars. The amount depends on how much tax was underreported or concealed.
• Additional penalties – In addition to fines, tax evasion convictions may include restitution payments, requiring the offender to repay the full amount of unpaid taxes. Failure to comply with court-ordered restitution can result in further legal consequences.
• Interest accrual – Unpaid taxes continue to accumulate interest and late fees until they are fully paid. This can significantly increase the total amount owed, making it more difficult to resolve tax debts.
• Civil fraud penalties – In cases of fraudulent tax returns, the Georgia Department of Revenue may impose a penalty of up to 50% of the underpaid tax amount. This penalty is separate from criminal fines and adds a significant financial burden.
• Federal tax consequences – A state tax evasion conviction can trigger federal investigations, leading to additional IRS scrutiny, penalties, and legal actions. Federal fines and criminal charges can be even more severe than state-level penalties, resulting in possible federal prison sentences.

Financial penalties for tax evasion are designed to recover lost tax revenue and deter future violations. The longer unpaid taxes remain unresolved, the greater the financial burden can become due to interest and penalties which may continue to rise as time goes on. Resolving tax disputes promptly before they escalate can help avoid criminal prosecution and additional legal consequences.

Prison Sentences for Tax Evasion Convictions

A conviction for criminal tax evasion in Georgia can result in significant prison time, depending on the severity of the offense. In some cases, individuals convicted of tax fraud face one to five years in prison, along with hefty fines and restitution requirements. Repeat offenders or those convicted of large-scale tax fraud schemes may receive harsher sentences.