Can You Go to Jail for Not Paying Taxes?

person in handcuffs behind bars

Taxation can be a significant source of anxiety and stress. That said, we can all admit that at least once in our lives, we’ve been guilty of putting off filing our taxes. While you may have innocently missed the deadline for filing or paying your income taxes one year, this can quickly snowball into several years if you feel like you’re getting away with evading your tax liability. The Internal Revenue Service (IRS) won’t send you to prison if you don’t have enough money to pay or forget to file your taxes. However, you could face jail time if you willfully commit tax fraud or tax evasion. Please continue reading to learn the criminal penalties you could face for not paying your taxes and how a seasoned Baldwin County Criminal Defense Lawyer can help protect your freedom.

What Happens if You Don’t Pay Your Taxes?

Generally, most U.S. citizens and permanent residents who work must file a tax return if they make more than a certain amount for the year. If you’re required to file a tax return but fail to do so, you may be subject to civil penalties. If you don’t pay your taxes for a particular year or even several years, you will incur late payment penalties on top of the taxes you owe. However, if you willfully fail to file a return, you could be subject to additional fines and criminal prosecution.

What Tax Crimes Can Lead to Jail Time?

The IRS will only pursue legal action if they suspect you’re committing criminal tax fraud or tax evasion. Although these terms are used interchangeably, they encompass different tax violations. Tax fraud occurs when someone intentionally commits an act to evade a tax assessment. Tax evasion falls under the leaky umbrella of tax fraud, but it refers to deliberately attempting to deceive the IRS to avoid paying or failing taxes owed.

It’s important to note that tax avoidance is legal and will not result in criminal penalties. Tax avoidance is when specific strategic steps are taken to reduce your tax bill, such as claiming deductions that are not prohibited by law.

What Are the Potential Penalties?

Tax fraud and tax evasion are serious criminal offenses that can lead to fines of up to $250,000 for individuals and $50,000 for corporations. Those convicted can also face up to five years in prison. Furthermore, you could be subject to a civil tax fraud penalty of 75% of the underpayment attributed to your fraud.

If you’re having any trouble with the IRS, it’s in your best interest to retain the legal services of an experienced lawyer from The Law Office of James M. Burns, who can help you navigate your legal options and effectively represent your interests.