Now that we are a couple of months into the new year, people’s thoughts are turning to tax season. Tax preparation companies are starting to advertise their services and software packages. News reports are starting to focus on refunds and how to take advantage of hidden credits and deductions. Whether you prepare your taxes on your own or you work with an accountant, when tax time rolls around there is always the small twinge of fear of an audit, and the question of what a tax crime is and who goes to jail for committing them. The good news is that there is a big difference between making a mistake on your taxes and committing a crime, and that very few people actually go to jail for tax evasion. Still, some do.
Who are those people? According to statistics provided by the Internal Revenue Service, out of a nation of over 150 million taxpayers, fewer than 1,500 people were convicted of tax evasion and sent to jail in 2015, and those are not people who did the math on their tax return wrong or who claimed that they gave money to their church but didn’t have a receipt to prove it. Instead, the people who get indicted for tax crimes are those who purposely understand their income, take credits or deductions to which they are not entitled, fail to file a tax return at all, and who then lie about it once they are called in for an audit.
You may wonder where that leaves you if you failed to file a return because you can’t afford to pay the taxes you owe. Again, there is good news here; the IRS generally does not indict people who have no money. In fact, they offer numerous forgiveness programs and payment plans to assist taxpayers who have fallen on hard times. Rather, their pursuit of tax criminals focuses on those who can afford to pay taxes but who purposely try to trick the government and avoid paying their fair share by hiding their income or assets. Tax evasion charges are generally not filed against taxpayers unless the IRS determines that their actions have been knowing and willingly committed over a period of time. They look for patterns that are apparent over years.
All tax crime charges begin with an audit, and that is where taxpayers have the opportunity to make things right. If you have received a notification of a tax audit, you need experienced legal representation. Contact us today to set up an appointment and learn more about our services.
