When it comes to paying taxes, the federal government does not mess around. You might be surprised to learn that numerous behaviors are classified as tax crimes. If you are convicted of any of these serious offenses, seek competent legal representation immediately:
- Tax evasion — Tax evasion is the act of using unlawful means to avoid paying taxes. In many cases, tax evasion involves one or more individuals misrepresenting their income with the IRS. Some of the most common forms of tax evasion in America are inflating deductions, underreporting income, and hiding assets in offshore accounts. If convicted of tax evasion, depending on the unique details of your case, you face costly fines, imprisonment, or both.
- Failure to file a tax return — If you realize you are not going to make the April filing date for your taxes, ask for an extension or you may face a failure to file tax return penalty. Typically, the penalty for not filing taxes is 5 percent of the taxes you owe for each month your return is late, with a maximum rate of 25 percent. Remember, there is also interest accruing on your unpaid taxes in addition to this failure to pay rate penalty.
- Filing a false tax return — Filing a false tax return is a serious offense punishable by expensive fines and imprisonment. Filing a false tax return is federal fraud, plain and simple. If you are an individual (as opposed to a corporation), and are convicted, you will face penalties up to $250,000 and up to 3 years in jail. For corporations, the fine increases to up to $500,000.
- Willful failure to collect or pay employee’s payroll withholding tax — According to federal statute, “Any person required under this title to collect, account for, and pay over any tax imposed by this title who willfully fails to collect or truthfully account for and pay over such tax shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined . . . or imprisoned not more than 5 years, or both, together with the costs of prosecution.”
- Failure to pay state sales tax — Failure to pay state sales taxes is typically penalized through civil penalties such as a 5 percent per month increase on a tax balance. The state may also punish you with state tax liens, wage garnishment, driver’s license suspension, other license suspensions (professional, business, hunting), and even, in rare cases, jail time.
Tax crimes are often innocent in nature. If you are accused of any type of tax-related offense, consult with a knowledgeable lawyer about how to proceed.
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