Penalties For Tax Evasion: Keep An Open Eye

In our country, tax evasion is punishable by law and it means, in a broad sense, any action taken in order to avoid paying taxes, or failing to report these taxes, or doing it in an inaccurate manner. Any cash income that is not declared will fall under the tax evasion legislation.

When calculating taxes, there are many issues to solve along the way. There are methods to avoid paying taxes, by using all the legal means. For instance, you can reduce the amount of the taxes due, by making use of the deductions stated by law. If there are people in your family that depend on you for sustenance, then you will pay less taxes. Some medical expenses can be deducted, as well as some expenses with retirement plans. If you give money for charity, you will also get lower taxes. All these actions are called tax avoidance and they have nothing to do with tax evasion, which is a criminal act. In case you do that, you will be subject to some serious legal punishments, like prison, or fines.

All the taxes are supervised by the Internal Revenue Service, or the IRS. They are the ones that are entitled to take legal action against those that do not pay their taxes.The financial organization has 3,000 employees that are especially taught how to discover people that wish to avoid to pay their legal taxes. Any financial information about you will become available to them, when they ask for, so there is little that you can hide from them.

As they supervise the activity in the whole country, many times, verifications are made randomly, but, mostly, signs of unusual activity are the ones that can signal that someone may be in an illegal situation, financially speaking. Such signs are claims for many deductions for one single individual, or declaration of very small amounts of money for individuals or companies that have many assets in their property. A company, but even a person, will have a lot to suffer, in case the IRS agents discover that taxes have not been paid. Money can be frozen in accounts, assets can be taken away and so on. Through these methods, they will be able to recuperate the money that have not been declared and taxed.

All these do not happen with no action from the party that is suspected of doing tax evasion. They have the right to present their part of the story to the IRS. The advice of a professional attorney will value greatly under such circumstances.

Here are the main tax evasion penalties that can be applied:

- For tax evasion, one can receive a prison sentence of up to 5 years, and be forced to pay fines in amount of about $100,000.

- For filing a false return, the penalty is prison for up to 3 years and fines in amount of up to $100,000.

- The last felony on the list is failing to file a tax return, which can bring you one year in prison and a fine of $25,000, multiplied by the number of years in which the returns have not been filed.

The financial world can get quite complicated and taxes are not something to be playing around with. Hire an accountant or another professional to take care of your documentation and papers if you cannot do it yourself. Instead of having problem with the IRS, it is best to go with someone that knows what they are doing.

Camie Ibara is the Editor and Publisher of Article Click. For more FREE articles for your ezine and websites visit - www.articleclick.com

Please Rate this Article...                  5 out of 54 out of 53 out of 52 out of 51 out of 5  Not yet Rated

More Articles From - Home | Finance | Taxes

• Tax Debt Settlement: What Is It? - By : Pearle Tsuji
  
• How To Increase Your Income, Lower Your Taxes and Help Your Favorite Charity - By : Robert D. Cavanaugh
  
• What Tax Records Can You Stop storing? - By : Darrin Mish
  
• Implications of the New, Heightened Tax Return Preparer Penalties - By : Hank Gutman
  
• Tax Reductions and the IRS Position on Cost Segregation - By : Patrick C O Connor
  
• Corporations avoid taxes – How they do it? - By : ratetake
  
• Understanding Common Tax Collection Issues - By : Larson Financial
  
• How to Handle Unpaid Back Taxes at the State Level - By : Larson Financial
  
• IRS Errors - By : Darrin Mish
  
• Finance: A Discussion on Progressive Taxation - By : Jeff LaRoche