Tax evasion is considered a grave offense, which can have significant consequences.
What is Tax Evasion?
Tax evasion means intentionally fabricating taxable income when reporting it to the Internal Revenue Service (IRS). Under the legal code known as 26 U.S.C. § 7201, it is a criminal offense that is punishable by law. It is a term commonly used when a business or person is criminally charged with tax fraud.
Under this law, any individual who intentionally tries to evade taxes or the payment of such taxes is guilty of a crime. If somebody is accused of tax evasion, it will result in a permanent record and he may face criminal charges and extreme penalties.
According to Marca, you can go to jail for not filing taxes or lying on your tax return, but you cannot go to jail for not having enough money to pay your taxes. In case you find yourself owing more taxes than you can manage to pay, there are alternative options to ignoring the situation altogether. The alternative is the installment agreement, which allows you to make payments over time.
Not adhering to state or IRS tax regulations can lead to severe penalties, both civil and criminal.
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Consequences of Tax Evasion
If a taxpayer fails to pay taxes, the IRS will likely send several letters requesting payment and offering payment plans to set up an online payment plan in case you don’t have enough funds to pay for the total debt. However, if you continue to ignore your taxes, the consequences of tax evasion in the USA can be severe.
The penalties and interest on unpaid taxes can accumulate fast, and the IRS can place liens and garnishments on your property and assets. Your passport can also be revoked, which can affect your ability to travel. Additionally, tax evasion can negatively impact your credit score, making it difficult for you to obtain loans or credit in the future. Debt collection by private agencies can also occur.
In conclusion, it is important to comply with state and IRS tax rules to avoid serious consequences of tax evasion. If you cannot afford to pay your taxes, explore payment plan options or seek professional help to avoid tax evasion charges.
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