Forgetting to pay your taxes last year may have been a mistake, but if years go by and you continue to “forget,” you could go to jail for not paying. Not only could you face this consequence if you fail to file your taxes, but you could also go to jail if you lie on your tax return. To better understand how these consequences work, and what the penalties are for dishonest actions related to your taxes, here’s what you need to know about going to jail for lying on Taxes.
Criminal vs. Civil Proceedings
If you’ve made the honest mistake of forgetting to file your tax return or writing an error on it, you won’t be sent to prison. In fact, most tax liability is civil, not criminal. You may find out you’ve made a mistake on your tax returns through an audit, and your responsibility would be to send in the remaining money.
However, if criminal charges are filed against you, you can go to jail. What would be considered a criminal charge related to taxes? The most common tax offenses are tax fraud and evasion. Fraud involves lying and trying to deceive the Internal Revenue Service (IRS), and evasion is when you use illegal methods to avoid paying taxes.
Types of Tax Crimes
Failing to file a tax return or entering false information can result in a variety of criminal charges. One of the most common charges is related to late payment. In most cases, this charge is applied when a taxpayer neglects to pay their income tax before the due date. If someone intentionally lies about their income so they can pay less taxes, this is considered fraud and could be penalized with more than a late payment fee. Willingly submitting false tax documents to the IRS is tax perjury and is against the law. The most serious of all tax crimes is tax evasion. Here is a breakdown of the types of tax crimes:
- False Entry or Failure to Enter in Records: This is considered a third-degree felony that is punishable by up to 10 years in prison and/or a $10,000 maximum fine.
- Failure to Pay Taxes Collected: If the amount unpaid is less than $10,000, it is considered a Class C misdemeanor and you could pay a fine of up to $100. The penalties increase if the amount unpaid is over $100,000. In a case as serious as this, it is considered a second-degree felony. You could face up to 20 years in prison, and/or pay a fine of up to $10,000.
- Resale of Exemption Certificate: Intentionally making a false entry can lead to a variety of penalties, depending on the amount unpaid.
- Willful and Fraudulent Acts: This third-degree felony is punishable by a maximum of 10 years in prison, and/or a maximum fine of $10,000. These acts include providing false information on your tax reports.
- Federal Tax Evasion: If you’ve been investigated by the IRS and have been found to attempt to evade or defeat tax payments, you could be facing serious consequences that include fines and jail time.
Penalties for Tax Crimes
The consequences for committing tax crimes ranges from fines to jail time, as mentioned above. To put it plainly, here are the penalties for tax evasion:
- Late payment penalties on the amount of tax owed
- Interest penalties on the amount of tax underpaid
- Five years in federal prison for felony tax evasion
- Fines of up to $250,000 for felony tax evasion
- A fine of up to $100,000 and three years in prison for tax perjury
Tips for Staying out of Jail
1. File Taxes on Time: If you are concerned about tax offenses, the simplest way to avoid arrest and jail time is to pay what is due as quickly as possible, and ensure you file future taxes on time, correctly.
2. Check Your Mail & Respond Accordingly: If you avoid reading your mail and fail to respond, the IRS will become even more suspicious of you. Deal with the situation as soon as possible to avoid worse consequences.
3. Cooperate During an Audit: Audits can be embarrassing and frustrating, but failing to cooperate will only hurt your chances of avoiding fines and arrest. You should always be respectful and honest.
4. Be Consistent: No matter what agency you speak with, whether it be the IRS, or someone else, always be consistent with your story and reports. If you report a certain number of sales, profits, or income, be sure that all your reports accurately present the same number. Failing to do so will result in concerns and red flags.
5. Save Your Records: Destroying records to support your lies is a crime. Once there is an investigation going on, the IRS will need to gather facts and evidence. If you are found to have destroyed records, it can seriously hurt your chances. Once you’ve been caught, the best thing for you to do is to be honest.
How a Bail Bondsman Can Help
Authorities in the state of Texas take tax offenses very seriously. They will not hesitate to prosecute you if you have been charged with tax evasion or fraud. If you have been arrested for committing tax fraud, your best method of action is to consult a bail bondsman.
PCS Bail Bonds can help you if you need to post bail. We provide 24-hour bail bonds for theft, tax fraud, drug possession, embezzlement, traffic violations, assault, and more.
We serve clients in Fort Worth, Texas, and other municipalities in Tarrant County. We process our clients’ requests quickly and efficiently. Our bond agents are always on call and we can be down to the jail in under 30 minutes. We pride ourselves in our reputation and our professional memberships in several renowned associations including the Professional Bondsmen of Texas, Tarrant County Bar Association, and Professional Bondsmen of Tarrant County.
Contact us now by phone at 817-335-1655, at our e-mail, visit in-person, or fill out our bail bond request form. We are the right team to work with because we offer 10% lower bond fees than our competitors!