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Penalties for Tax Evasion
Written by Administrator Friday, 15 August 2008 17:03 |
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Tax evasion is the illegal avoidance to pay taxes, not reporting cash income, or inaccurate reporting of cash income, and there are strict and very serious penalties for tax evasion imposed by the government. Companies or individuals that intentionally avoid paying their state or federal income taxes can expect severe penalties when it comes to tax evasion, including prison terms and large fines. In the United States, the Internal Revenue Service, IRS, is the agency that oversees tax regulation of both state and federal taxes. They also prosecute any individual, company, or entity who avoids paying any taxes they may have due, and can assess the penalties for tax evasion they may face. There are almost three thousand special agents employed by the IRS trained specifically to gather information that is used in order to detect tax evasion. They are able to access tax returns, they have the power to issue a summons in order to access more financial information, and they have the right to seize or freeze money in an attempt to collect necessary financial information. Each year, the IRS randomly audits some taxpayers; however, the majority of audits are done due to unusual activity done by the taxpayer. If an individual, company, or entity claims a bunch of deductions in direct proportion to their income, or if they have multiple assets yet claim to have a very small income, then there is a greater chance an audit may result. If the IRS is able to determine that taxes are purposely being evaded, they can then, levy tax liens, seize assets, garnish wages, and freeze money in bank accounts. If you do not make any attempt to repay what is owed, any and all properties can be seized and sold at auction. Any individual can be charged with up to three crimes if they are found to have purposely evaded paying their taxes. First there is the charge of tax evasion. Considered a felony, and if convicted, the penalties of tax evasion include a prison sentence of up to five years, fines up to $100,000, or both. Next is the charge of filing a false tax return. With this charge, the government doesn’t have to prove that the individual purposely tried to evade tax laws; just that what was filed was false. This is also a felony and can result in a prison sentence of up to three years, fines up to $100,000, or both. Lastly, there is a charge of not filing a tax return. This is considered a misdemeanor and can result in a maximum prison sentence of one year, fines totaling up to $25,000 for each year they did not file the return, or both. Many taxpayers depend on their accountants or business managers to take care of their financial business and may not even be aware of their financial status. Unfortunately, it is the taxpayer who is ultimately responsible for the information that is given to the IRS, and it pays to fully examine your tax returns before they are filed and make sure they are accurate. Doing say may help you to avoid the penalties of tax evasion.
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| Last Updated ( Monday, 18 August 2008 03:56 ) | |
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