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Non-Filing & Tax Crimes

Very few people are put in jail for not filing a tax return, but it can happen. A willful failure to file a tax return is a misdemeanor if you owe taxes. You can be sentenced for “up to a year in jail and a $25,000 fine” for each year of non-filing. (Internal Revenue Code § 7201.) If your failure to file is deemed to be part of a scheme to evade taxes you can be charged with a felony, a more serious tax crime, which carries a maximum punishment of five years in prison and a monetary penalty of $100,000” but rarely is anyone criminally prosecuted for this felony. (Internal Revenue Code § 7201 (1).) The felony crime requires a deceitful act beyond the non-filing, such as intentionally using a false Social Security number. The misdemeanor doesn’t require any additional deceitful act. If you are contacted by an IRS agent about your non-filing, but you are not asked to file a return, start worrying. This may mean that you’re on the way to the IRS Criminal Investigation Division, or CID. This does not guarantee you will be prosecuted, only that you might be. A small percentage of non-filing cases result in criminal prosecutions. But, you still have to get your past-due returns prepared and filed. Call us at IRS-SOLV for more.

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