Filing taxes is expected of everybody who works in our country and, each year, many people abide by the correct filing dates so they are not held accountable for late taxes. Tax evasion, however, is when a person or company purposefully underpays taxes to the IRS. This, of course, does not include mistakes – which, let’s face it, everybody makes from time to time. Tax forms can be long and grueling as well as following a complicated and complex Internal Revenue Code. If you make a simple error, you will be contacted about it so you can fix your mistake – the IRS won’t come knocking on your door and arrest you for underpaying a little. If you are convicted of tax evasion, it is because the IRS successfully showed that you deliberately underpaid your taxes. You may have heard about celebrities or other famous characters in time who evaded taxes and did time in prisons because of it. In 2013, Lauryn Hill (a Grammy-winning singer) began serving a three-month prison sentence because she failed to pay over $1.8 million in taxes between 2005-2007. Her lawyers spoke on her behalf saying that family circumstances called for emergency savings and she actually paid back the taxes when the IRS came knocking – however, by then it was too late and the crime was already committed. There are many other examples of how tax evasion can occur. For instance, the IRS could discover that someone never actually filed taxes when they were supposed to in the first place. On another occasion, somebody may have underpaid their taxes fraudulently so they could keep what they made. Sometimes, waitresses as well as business owners will underpay taxes because it is difficult for the IRS to follow the paper trail. Families will also sometimes overstate the size of their household in order to take larger deductions by the IRS.
When somebody commits this white collar crime, the IRS will conduct an investigation through the IRS Criminal Investigation (CI), which is the law enforcement branch of the agency. These investigators will investigate tax crimes, money laundering, and Bank Secrecy Act violations. The tax system widely relies on voluntary compliance from those who owe taxes. Because of this, they will attempt to discourage violations by publicizing convictions, seeking prison time for offenders, and hand out fines as well as penalties.
What Are Penalties to Tax Evasion?
Not paying taxes: If you evade paying taxes and are caught, you are guilty of a felony. You could receive imprisonment up to 5 years, a fine of not more than $250,000 for individuals or $500,000 for corporations, or both of these penalties. Fraud or false statements: You will receive imprisonment of up to 3 years, a fine of not more than $250,000 for individuals or $500,000 for corporations, or both penalties. Willfully failing to file a return or pay tax at the time required by law: The taxpayer will be guilty of a misdemeanor and be subject to imprisonment for no more than 1 year and a fine or not more than $100,000 for individuals or $200,000 for corporations, or both penalties. Have you been arrested for a tax crime and need to speak to an experienced attorney? Call The Law Office of Peter Blair today for more information on what you need to do. We will answer all of your questions and help you every step of the way.