If you are like many Georgians, you probably filed your tax returns weeks ago. You may already have received your refund(s). Even so, this is the time of year when most taxpayers feel just a little apprehensive about their tax returns. Did you make any mistakes? Were your figures all correct? Did you take all the deductions the IRS allows? Did you calculate everything correctly? And then the biggest question: Will the Internal Revenue Service come after you for additional taxes it says you owe or, worse yet, accuse you of tax evasion?
Luckily for you and all other taxpayers, the IRS knows that taxpayers are only human. And human beings sometimes make inadvertent mistakes, including on their tax returns. The IRS does not consider mere mistakes as tax evasion. Rather, it must believe you deliberately did something, such as one of the following things, in order to come after you for tax evasion:
- Did not file a tax return
- Filed a fraudulent tax return
- Did not report the full amount of your income
- Took deductions to which you were not entitled
- Placed your assets in the name of someone else so as to hide them
- Destroyed your financial records so as not to leave a paper trail
Civil suit versus criminal prosecution
The IRS can come after you in one of two ways, civilly or criminally, if it believes you deliberately evaded paying the amount of taxes it believes you owed. If it prevails against you in a civil suit, you face having to pay not only the additional amount you owe, but also interest and penalties. If the prosecutor convicts you of criminal tax evasion, you face a prison sentence in addition to having to pay the taxes you did not pay, plus interest and penalties and a fine.
Criminal tax evasion penalties
If you receive a criminal tax evasion conviction, the penalties you face depend on exactly what your conviction is. For instance, if your conviction is for failure to file your tax returns, the penalty is a maximum prison sentence of 12 months plus a $100,000 maximum fine for each year you failed to file.
If your conviction is for filing a fraudulent tax return, the penalty is a maximum three-year prison sentence and a 100,000 fine. A conviction for misrepresenting your income by concealment or otherwise gets you a maximum prison term of five years and a $100,000 fine.