Punishment for tax fraud is not a joke. Every year, the government punishes several people for crimes related to tax. Today, punishment for tax fraud is similar to the civil penalty. However, there are a few cases in which taxpayers could get criminal charges. Those cases are the ones when the case is handed to the IRS Criminal Investigation Unit by IRS auditors.
Punishment for Filing Fraudulent Return
Tax fraud is a kind of white-collar crime. This crime involves tax avoidance, failing to disclose assets, tax evasion, tax avoidance. It is an attempt to lie in order to defraud the IRS. For tax frauds, there are civil as well as criminal penalties.
Filing a fake tax return is a serious offense. It is quite common and the penalties for this offense are quite less severe. It could be punishable by up to a fine of $100,00 or $500,00 for the corporation as well as imprisonment of 3 years. It is essential to understand that the IRS does not bother the responsible taxpayers.
For involving IRS, you would need to lie intentionally as well as knowingly on the tax documents. It would include numerous things such as changing the forms to replicate the false information or leaving certain income off the tax statements repeatedly.
Punishment for Failure to File Tax Return
Usually, this crime is a misdemeanor. For failing to file a tax return, you could face fines up to $25,000 and a year in jail. You would need to pay this fine of $25,000 for every year you did not pay. No matter how long ago the tax was due, you might get the civil penalties for the unpaid tax return.
In case the tax return is due in less than six years, you would face criminal charges. This means if you do not file a tax return once, IRS can contact as well as punish you in the next six years. Once the duration of six years completes, the IRS would not pursue any charges. IRS would get in touch with the non-filers by letter, phone call, formal notice, or visit by an IRS agent.
Penalties for Tax Evasion
When the taxpayers use illegal ways to misinterpret or conceal the financial details, it is known as tax evasion. This criminal offense crime is different from filing false tax returns or tax avoidance. It is done by individuals involved in criminal enterprises. In case the court convict’s taxpayer for tax evasion, penalties can include jail of 5 years. Moreover, the fines could total up to a fine of $100,000.
Apart from these, failure to keep records or pay taxes is also a misdemeanor. Rather than criminal, the penalties would be civil. In criminal penalties, you might face fines of up to $25K and 1 year in jail. In rare cases, the IRS gets this wrong. If you’ve done something that you think could result in criminal charges being levied against you, you need to consult Colorado Legal Defense Group immediately – especially if you live in the Denver area. The legal experts would check the evidence and help you with a solution.