Tax Evasion Penalties

Dealing with tax evasion has always been one of the most difficult challenges for governments all round the world. Tax evasion is done by individuals belonging to different strata of the society in different ways. As per the surveys and reports, there are many people who provide false income details to the tax authorities to reduce the amount of liability. Some others try to seek tax exemptions by deliberately going against the law. Apart from the people who file false and misleading income tax returns, there are people who do not file them at all. Most of the governments across the world have declared these practices as illegal and have described tax evasion as a serious offense. Having a proper penalty is an attempt by the governments to curb these malpractices. The federal penalties have been decided after considering the seriousness of the financial crimes. These penalties can help the government recover maximum amounts in the form of tax and utilize the money for the benefit of the common public.

What Are the Penalties for Tax Evasion?

The Internal Revenue Service (IRS) tax evasion penalties is a way of recovering taxes from people. These penalties can be a fine of around $1,00,000 and/or a prison sentence of up to five years. This penalty can be imposed if the Internal Revenue Service pursues a felony conviction. There are strict laws to deal with those people who file a false return of their income tax. Any person found guilty of such an offense can get a prison sentence of up to three years and/or a fine which is the equal to that for evasion of taxes. The penalties are also charged by the IRS for those people who pay the taxes with a bad bank checks which get dishonored. The penalties imposed on such individuals can be two percent of the total amount on the check. You might not be penalized for the above thing only if you can prove that your intentions were not negative. There are penalties for people who have not filed for their income tax returns at all. Any person found guilty of such an offense can be fined $25,000 for every year of non-payment of the taxes and/or imprisonment which can be up to one year at the most.

Apart from those who do not pay their taxes, the IRS has to deal strictly with those who pay their taxes after the last date issued to them. On such people, the IRS imposes the late tax penalty which is around five percent of the amount which the person needs to pay as his tax for the year.

The system set by the Internal Revenue Service (IRS) for the recovery of the taxes from the public is very sound. The IRS has many agents who work in a very professional way to investigate and check for evasion. There are times when surprise checks and investigations are conducted on several tax payers to find out if they have resorted to illegal means of seeking tax deductions or have paid less tax. The bank accounts and the assets of any person found guilty can be seized by the IRS. In most of the cases, the defaulters are given time to pay off their pending taxes and the failure to do so can result in the auctioning off the assets to recover the taxes.

The penalties for tax evasion are hefty and so, one should refrain from any kind of non-payment of taxes. So, pay tax and relax!