Filing income tax isn’t something that most people would consider a fun activity, but is something that must be done if you have taxable income. If you don’t file your income taxes, there is a chance that you could face criminal charges.
There are two terms that people often use interchangeably, but they are actually very different terms. One of these is tax evasion and the other is tax avoidance. Tax evasion is illegal but tax avoidance isn’t.
Tax evasion is the act of not even filing taxes. This means that you are trying to get away with not having to pay the taxes that you truly do owe to the government. You can also face issues for tax fraud, which means being purposefully untruthful on your income returns.
Tax avoidance is simply using legal means to reduce your tax bill. This can include taking deductions and using tax credits to lower the amount that you have to pay.
When there are issues with income taxes, the Internal Revenue Service (IRS) will look into the matter. A determination about your intent is usually made so the agency’s representatives can decide how to proceed.
If you are determined to have committed tax evasion or any form of tax fraud, a criminal investigation will be started. Ultimately, you can face time in prison if you are convicted of a crime related to your income taxes.
The federal government has vast resources to investigate and prosecute these cases. You need to get your defense prepared against the charges. It should address the facts of the case and show your side of the story.
Source: The Balance, “What Is the Difference Between Tax Avoidance and Tax Evasion?,” Jean Murray, accessed Nov. 02, 2017