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No one likes paying taxes, especially when you have to pay a lot of it. Many taxpayers try to find ways to by pass the system by not paying correct amount of taxes or simply evading the taxes. IRS and State Tax authorities take tax evasion very seriously. Our Articles ” Tax Fugitive & Tax Crimes: Key Facts” addresses each area of Tax Crime and How our IRS and States deal with Tax Fugitives.
What is a Tax Fugitive?Tax Fugitive is a person who flees or tries to escape State or Federal prosecution, who is typically involved in a criminal case who tries to elude law enforcement especially by fleeing the state or country.
Many taxpayers who get convicted of Tax crimes and frauds flee to avoid prosecution. Some run to Mexico and many go to countries that don’t have good relationship with US or don’t have extradition treaties so they cannot be sent back to US for prosecutions.
What is considered a Tax Crime?Tax crime is using illegal means to avoid paying Federal, State or Local taxes. Typically Tax Crimes occur when an individual or a business entity misrepresent their income to the Internal Revenue Service(IRS) or to State or Local government.In the United States, tax crimes may result in large monetary penalties, imprisonment, or both.What are The Five Primary Types of Tax Crimes?Five Common types of Tax Crimes include
- Willful Failure to Pay Income Taxes.
- Making a Frivolous Tax Claim.
- Offshore Income and Assets such as Bank Accounts
- Common Employment Tax Fraud Scams.
- Tax Preparer Fraud.
Each of these tax crimes can land you in jail and may result in serious penalties from IRS.
Are Tax Crimes Civil or Criminal?Depending upon severity of the crime and Dollar amount involved a Tax crime can be Criminal. If a taxpayer commits tax evasion or tax fraud, the IRS can prosecute the taxpayer and send him/her to jail.Most tax crimes carry a maximum five-year prison term and a fine up to $100,000.If the amount of tax evasion is minor and taxpayer doesn’t have any other criminal past, sometimes, IRS will lower the threshold to Civil tax fraud and taxpayer can avoid jailtime by paying all the penalties and interest.What Kind of Crime is Tax Evasion?Tax Evasion is mostly a Criminal Offense can result in jail time mostly up to 5 years.In addition to jail time you may be required to pay monetary penalties from 250k to 500k as well.What are Examples of Tax Evasion?
Here are some examples of Tax Evasion.
- Not collecting and/or paying Employment Taxes
- Tax Schemes for Reducing income or inflating expenses
- Money Laundering
- Non Reporting of Foreign Bank Accounts & Assets
- Not reporting Cash Income
- Paying Employees under the table
IRS has a proactive Criminal Division that actively monitors suspected taxpayers who are involved in money laundering or tax evasion.
IRS Has Following Programs that are responsible for Catching Tax Evaders. Each of these program target a particular type of Tax Crime and they are very efficient in catching
- Abusive Return Preparer Enforcement
- Abusive Tax Schemes
- Bankruptcy Fraud
- Corporate Fraud
- Employment Tax Enforcement
- Financial Institution Fraud
- Gaming
- General Fraud Investigations
- Healthcare Fraud
- Identity Theft Schemes
- International Investigations
- Money Laundering & Bank Secrecy Act (BSA)
- Narcotics-Related Investigations
- Non-filer Enforcement
- Public Corruption Crimes
- Questionable Refund Program (QRP)
