{"id":1063,"date":"2022-04-30T03:00:49","date_gmt":"2022-04-30T03:00:49","guid":{"rendered":"https:\/\/taxreliefprofessional.com\/?p=1063"},"modified":"2023-09-25T20:30:40","modified_gmt":"2023-09-25T20:30:40","slug":"tax-evasion-101-examples-penalties-and-how-to-avoid-it-at-all-costs","status":"publish","type":"post","link":"https:\/\/taxreliefprofessional.com\/tax-relief\/tax-evasion-101-examples-penalties-and-how-to-avoid-it-at-all-costs","title":{"rendered":"Tax Evasion 101: Examples, Penalties, and How to Avoid It at All Costs"},"content":{"rendered":"\n

It has probably crossed everyone\u2019s mind at some point in life, \u201cwould the IRS notice<\/a> if I didn\u2019t file my taxes?\u201d You might skim by for a while, but eventually, the IRS will discover what you\u2019re doing.<\/p>\n\n\n\n

Even before the internet and cyber tracking, the IRS noticed and didn’t play nice. Al Capone\u2019s tax evasion penalties<\/a> include 11 years in federal prison, a $50,000 fine, $7,692 for court costs, and $215,000 plus interest for back taxes for a 1931 conviction.<\/p>\n\n\n\n

So what exactly is tax evasion? What is the difference between tax avoidance and tax evasion? Keep reading so you don\u2019t become an IRS target.<\/p>\n\n\n\n

What Is Tax Evasion?<\/h2>\n\n\n\n

The definition of tax evasion<\/a> is the illegal underpayment or nonpayment of tax. If you deliberately do not pay taxes, you are guilty of a crime. Your charge will be in federal court, and you may incur jail time and penalties.<\/p>\n\n\n\n

The IRS can find you guilty of tax evasion even if you don’t file tax forms. The main factor for determining guilt is the agency\u2019s ability to show the avoidance is willful.<\/p>\n\n\n\n

Evasion includes finding ways that are legal to reduce your tax obligations. When trying to decide if a taxpayer is evading payment of taxes, the financial situation of the person or business is examined. The investigation reveals if the nonpayment is because the person or entity is committing fraud or concealing reportable income.<\/p>\n\n\n\n

Fraudulent concealment includes a person reporting income under a fake name and social security number. In this type of scenario, the person may also be guilty of identity theft.<\/p>\n\n\n\n

Other examples of tax evasion include failing to report income that does not follow a traditional payment method. A common term for this is getting paid \u201cunder the table.\u201d If you do not report this income to the IRS, you are guilty of tax evasion.<\/p>\n\n\n\n

Penalties include jail time of up to five years, fines up to $500,000 for corporations or $250,000 for individuals, plus the cost of prosecution.<\/p>\n\n\n\n

Tax Evasion of Assessment<\/h2>\n\n\n\n

Evasion of assessment means you avoid paying tax by transferring assets to keep the IRS from assessing your correct tax liability. You accomplish this by hiding assets to prevent them from being counted. This deceitful method of underreporting is tax evasion.<\/p>\n\n\n\n

For the IRS to prove you are evading assessment, they must prove it is an intentional act, not an innocent mistake.<\/p>\n\n\n

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\n Evaluate your tax situation\n <\/h2>\n

\n By evaluating your tax situation, you can identify areas where you may be able to reduce your tax burden and make informed decisions about your financial future.\n <\/p>\n \n \n\n\n

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