Tax evasion is usually understood to be the act by which an individual purposely chooses to not pay out income taxes. They may decide to simply not file a return, or not include information about taxable income on the return they file. This can be regarded as a fraudulent act by the government, and could bring some extremely rigid penalties if found guilty. Not every omissions from a tax return are considered to be evasive, since it is feasible to ignore something when processing. Everybody is given an opportunity to show their innocence.
Intent Is The Key
In all cases of tax evasion, it's up to the IRS to prove that a tax payer planned to omit just about all or part of their earnings to avoid paying out income taxes on it. If it could be demonstrated that a taxpayer did not intend to omit a portion of their income for tax reasons, then they will likely be given the opportunity to file an amended return. This will correct the omission, and all sorts of investigations will be closed. On the other hand, if it could be confirmed that the intention was there on the part of the tax payer to swindle the government, and deny them the taxes which was due, then the tax payer would be held over for trial and potential charges.
Penalties
Carrying out tax evasion is recognized as a felony in the United States, and any person found guilty of committing it might wind up paying a substantial penalty, or face time in prison. In case an individual is found guilty, they could be in jail for approximately five years, as well as paying a penalty of at least $250,000. It's a different matter for companies that are found guilty for the same offense, because their fines can start $500,000 minimum. Being assessed a penalty, even as a corporation, does not mean that the accountable parties will avoid imprisonment, but may be sentenced once it is determined who was responsible for doing the omission.
It is also feasible for a person, or company to face penalties under the same law for willfully neglecting to collect, or pay taxes. For example, an entrepreneur which fails to collect and pay sales taxes in his area for items sold, could face charges of felony tax evasion, pay the fine as much as $250,000, or face up to five years in prison. A corporation who fails to pay out federal or state income taxes for each worker, for example, could be assessed twice the maximum fine, or $500,000, for every offense.
Dishonest Statements
Also considered to be a crime is the inclusion of false statements on the tax return. This will have a charges of three years imprisonment, and penalties of $200,000 for individual taxpayers, and as much as $500,000 for corporations. Any failure to file for obligatory tax documents, pay money owed, or give required information can be considered a misdemeanor. Based on the Internal revenue service, this can mean one year in prison and $100,000 for people, and $200,000 for businesses.
