219 99

According to IRS, there’s less than a percent of taxpayers who are involved into tax crime convictions. Still, the same agency estimated that around 17% of taxpayers have failed to comply with tax code one way or another. It’s the individual taxpayers than corporations that are committing 75% of income tax fraud.

What’s an Income Tax Fraud?

In simplest explanation, it’s the willful attempt of evading tax law or defrauding the IRS.

Tax fraud does occur in the event when an entity has intentionally failed to file their income tax return, willfully fail to pay their tax due, prepares and files false tax return and makes false or fraudulent claims.

Service workers who were paid in cash as well as self-employed taxpayers who run cash-based businesses are reported to be the most common type of taxpayers who commit tax fraud. It’s for the straightforward reason that they can easily underreport or falsify their cash income.

On the other hand, clothing and restaurant owners, doctors, salespeople, car dealers, accountants, hairdressers and lawyers were ranked as top offenders in government study for income tax fraud.

The Penalties that Await

Assuming that you are caught or audited by the IRS that you are violating the law and intentionally evade paying your income taxes, you’ll be subjected to civil and criminal penalties. When it happens, you may be eligible to imprisonment of 5 years or more, a fine of 250,000 to 500,000 dollars or suffer both penalties including the prosecution cost which will vary depending on your violation.

𐌢