| Tax evasion is illegally avoiding paying taxes, failing to | | | | very small income, an audit may result. If it is |
| report, or reporting inaccurately. The most common | | | | established that taxes have been intentionally evaded, |
| one is failing to report cash income. The government | | | | the IRS can levy tax liens, seize assets, freeze money |
| imposes strict and serious penalties for tax evasion. | | | | in check and savings accounts, and garnish wages. |
| Tax evasion is different from tax avoidance, which is | | | | Any and all properties held by the individual taxpayer |
| making use of legal methods to minimize tax due. | | | | can be seized and sold at auction if no attempt is |
| There are many deductions you can legally claim to | | | | made to repay the liability. |
| reduce your tax liability, for example if you have | | | | Everyone that is determined to be involved in an |
| dependents (the more dependents, the lower your | | | | evasion of tax liability has the right to meet with the |
| taxes), if you have certain medical expenses or if you | | | | IRS and be heard. Should you find yourself in this |
| contribute to certain retirement plans or to charitable | | | | situation, it would be wise to engage a tax attorney. |
| organizations. Taking advantage of them and keeping | | | | There are three crimes with which an individual may |
| your tax bill to a minimum is quite legal and if you do | | | | be charged: |
| that you are guilty of no crime. However, when | | | | * Tax evasion: This is a felony and a conviction can |
| companies, individuals, or any other legal entities | | | | carry a prison sentence of up to five years and/or |
| intentionally avoid their legal responsibility, that is tax | | | | fines up to $100,000. |
| evasion and the penalties are severe, including prison | | | | * Filing a false return: The government does not have |
| terms and hefty fines. | | | | to prove the taxpayer intended to evade tax laws, |
| The Internal Revenue Service (IRS) oversees the | | | | just that the taxpayer filed a false return. This is a |
| regulation of taxes. It also prosecutes any person or | | | | felony and can result in a prison sentence of up to |
| entity that avoids payment of taxes due, and can | | | | three years and/or fines up to $100,000. |
| assess penalties. | | | | * Failing to file a tax return: This is a misdemeanor and |
| The IRS has nearly 3000 special agents who are | | | | can result in a maximum prison sentence of one year |
| trained to gather the information used to detect tax | | | | and/or fines totaling up to $25,000 for each year for |
| evasion. They have access to tax returns, the power | | | | which no return was filed. |
| to issue a summons for access to further financial | | | | Many individual taxpayers rely on accountants and |
| information, and the right to seize or freeze monies in | | | | business managers to handle their financial affairs and |
| the attempt to collect the necessary financial | | | | may not be aware of the status of their finances. |
| information. | | | | However, the individual taxpayer is responsible for the |
| The IRS audits some taxpayers at random each year, | | | | information provided to the IRS. Do yourself a favor |
| but most audits are a result of unusual activity. If a | | | | and examine your return, understand what you're |
| person claims a lot of deductions in proportion to their | | | | reading, and check that it is accurate. |
| income, or if a person with a lot of assets declares a | | | | |