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The federal crime of tax evasion and potential penalties

Most citizens of Pennsylvania and across the country are aware that under no circumstance does the law tolerate tax evasion. Therefore, the Internal Revenue Service considers anyone who attempts to pay his or her taxes in an unlawful manner to be guilty of tax evasion, a federal crime that carries strict penalties.

Whenever the IRS suspects that a taxpayer may be guilty of tax evasion, it will contact the taxpayer via a private visit, correspondence or telephone. Following the initial contact, an agent could choose to immediately enforce penalties or begin an investigation through the Criminal Investigation Division into the financial actions and accounts of the taxpayer. The investigators also have the right to tap the suspect's phone lines to see if he or she will try to move his or her money to another country.

If the investigation reveals the suspect's deliberate intent to cover up a sizeable income that he or she did not report on an income tax return, then that person may face penalties based on three degrees of tax evasion: failing to file taxes, falsifying a return and returns that involve cheating. The first two of these actions are considered felony crimes.

Penalties for tax filers who completely fail to file a return include a full payment of past taxes due plus legal fees, a maximum $100,000 fine for individuals and $200,000 for corporations, and up to a year in jail. For falsifying and cheating on a return, the penalties include a maximum fine of $250,000 for individuals and $500,000 for corporations. However, a maximum five-year jail sentence is imposed on tax cheaters versus a maximum of three years of jail time for falsifying a tax return.

People who face the potential consequences of tax evasion might benefit from the services of a local criminal defense attorney who is experienced in such cases. Through possible negotiation strategies, the attorney may be able to assist the defendant to avoid the full ramifications of a felony crime.

Source: Houston Chronicle , "Penalties for Tax Evasion", Kristie Lorette, October 10, 2014

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