Tax evasion is one of the categories under the tax fraud umbrella. It is a term generally used when a person or business is criminally charged with tax fraud. Tax evasion is a deliberate misrepresentation in reporting taxable income to the Internal Revenue Service (IRS) and is legally prosecuted under 26 U.S.C. § 7201.
26 U.S.C. § 7201 specifies that any person who willfully attempts to evade taxes or the payment of such taxes is guilty of a crime.
If you are charged with tax evasion, this will be reported on your permanent record and you will be subject to criminal charges and substantial penalties.
You can go to jail for not filing taxes. You can go to jail for lying on your tax return. However, you cannot go to jail for not having enough money to pay your taxes.
If you owe more taxes than you can afford to pay, you have better options than simply not paying. And that alternative is the installment agreement.
In general, failure to comply with state or IRS tax rules can result in serious civil and criminal penalties. And the longer you go without paying your taxes, the more serious the situation becomes.
What happens if I don’t pay taxes?
If you fail to pay your taxes, the IRS will likely send you several letters requesting it and offering you offers to set up an online payment plan in case you don’t have enough funds to cover the total debt. However, if you don’t do your taxes, these are the consequences of tax evasion in the USA:
Penalties and interest.
Liens and garnishments on your property and assets.
Your passport can be revoked.
Affects your credit score.
Debt collection by private agency.
IRS audit.
Go to jail for tax evasion.
Expenses accumulate.