Tax Lawyer NYC: Manhattan False Invoice Defense

The client operated a distribution company in Manhattan and received a formal audit request from the New York State Department of Taxation and Finance. The auditor demanded invoices, bank statements, purchase orders, and proof of delivery for a defined twelve month period. Several vendor invoices reflected amounts that exceeded actual goods received, and those figures were incorporated into tax filings. The client stated that cash flow pressure influenced internal bookkeeping decisions, and counsel treated that admission as a potential indicator of willfulness that required careful legal framing.

Under N.Y. Tax Law § 1801, a tax fraud act includes filing or submitting a document that contains materially false information or engaging in a scheme to defraud in connection with a tax imposed by the Tax Law. Criminal tax fraud in the fifth degree under N.Y. Tax Law § 1802 is a class A misdemeanor when a person commits a tax fraud act. Higher degrees, including fourth and third degree offenses, apply when the amount paid in excess of what was due exceeds statutory thresholds within a period of not more than one year, as defined in N.Y. Tax Law §§ 1803 and 1804. The defense therefore focused on how the alleged excess amount was computed and whether the State could prove the statutory dollar thresholds.

New York Tax Law § 1801 requires that the tax fraud act be committed willfully. The defense structured communications to avoid inconsistent statements and limited interviews to carefully prepared sessions supported by documentary evidence. Counsel emphasized that the irregular invoicing occurred during a short period of financial strain and did not reflect a sustained plan to evade tax. By narrowing the narrative, the defense sought to undermine any inference of deliberate scheme based conduct.

The defense engaged a tax professional to reconstruct accurate sales tax liability using bank data, point of sale records, and verified supplier documentation. The client prepared proof of taxes already remitted and a payment plan for any remaining balance. Internal accounting controls were implemented to require independent verification of related vendor invoices before entry into the ledger. This remediation package demonstrated corrective action and reduced the likelihood of elevated charging decisions.

Prosecutors initially evaluated felony exposure under N.Y. Tax Law § 1803, which applies when the excess tax amount exceeds three thousand dollars within one year. The defense demonstrated that several transactions were improperly categorized as taxable and that certain invoices were supported by delivery documentation not previously credited. After adjustments, the revised calculation supported a misdemeanor level resolution under N.Y. Tax Law § 1802. The court imposed a monetary fine and required structured payment compliance without imposing incarceration.

The defense also evaluated potential exposure under N.Y. Penal Law § 175.10, which addresses falsifying business records in the first degree when intent to defraud includes intent to commit or conceal another crime. Counsel ensured that remediation efforts did not create inconsistent ledger entries that could trigger additional allegations. By aligning tax corrections with record consistency, the defense reduced collateral criminal risk. The final outcome allowed the business to continue operations without a felony record.

N.Y. Tax Law § 1801 defines a tax fraud act and includes materially false filings and schemes to defraud related to taxes imposed by the State. N.Y. Tax Law § 1802 classifies criminal tax fraud in the fifth degree as a class A misdemeanor when a person commits such an act. N.Y. Tax Law §§ 1803 through 1806 establish increasing felony degrees based on the excess tax amount within a one year period. These provisions require proof of willfulness and statutory dollar thresholds.

N.Y. Penal Law § 175.10 addresses falsifying business records in the first degree when intent to defraud includes intent to commit or conceal another crime. Invoice driven tax cases may implicate this statute if ledger entries were created to support an improper tax position. A coordinated defense strategy must therefore reconcile tax liability corrections with record accuracy to avoid compounding exposure. Careful statutory mapping remains central to any effective NYC tax lawyer defense in Manhattan.