Tax season is almost no one’s idea of a good time. This particular time of the year has the relatively unique quality of imparting extreme frustration and stress over the relatively innocuous task of filing some paperwork. Even more than that, however, is the fear that if mistakes are made, the consequences could be disastrous. In fact, many of us are worried that if we make a mistake or fail to file our taxes with the IRS by the designated due date, we could end up in jail. How realistic is this fear? If you’re worried about whether or not you can go to jail for not paying your taxes, the attorneys at McKellar & Easter, Attorneys at Law, can help you.
Can you end up in jail if you don’t pay your taxes?
The answer to this question is a bit complicated. You could end up in jail if you fail to pay your taxes under certain situations. However the IRS isn’t in the business of putting individuals in jail who simply make a small error. That doesn’t mean that you won’t face any consequences at all if that happens, of course, but the chances of ending up in jail for a minor error is relatively low. It would still be smart to seek legal advice from an experienced attorney who understands how tax law works, of course, for more information about what you can expect if you have been contacted by the IRS.
Tax Law and Jail Time
Tax law is a particularly complex area. This is one of the reasons why it can be so difficult to determine the exact consequences you might face if you end up in trouble with the IRS. With that said, there are a few situations in particular that are far more likely to end with jail time than others. If you make an error on your return, as mentioned above, you are unlikely to end up with jail time. The same is true if you file your taxes but cannot afford to pay them. The IRS is more likely to be forgiving with you, in other words, if you simply don’t have the money to pay than if you don’t file at all.
If you fail to file your taxes at all, you could very well find yourself facing jail as a potential penalty. The same is true if you intentionally lie on your return to avoid paying taxes or to alter the amount of money you either have to pay or receive as a refund. There are three main actions that could land you in jail:
- Tax Evasion
- Failure to File a Return
- Aiding Someone in Evading Taxes
Tax evasion, as the name implies, is the act of attempting to evade paying taxes. This includes any action that is taken specifically to avoid the assessment of taxes, like filing a fraudulent return. Tax evasion can put you in prison for up to five years. Remember that tax evasion was used to take down criminals such as Al Capone – it is not a charge to laugh at. While the law has changed somewhat since the 1930s, you could still end up behind bars for evading taxes. If you are accused of this particular crime, you should reach out to experienced attorneys immediately to discuss your case and start to devise the most effective legal strategy.
Failure to File a Return
Many people know that they cannot afford to pay their taxes, and so they simply don’t file a return. This can put you in jail for one year per year that you failed to pay. If you failed to file your return for six years, for example, then you could potentially be sentenced to six years in jail. Note that this issue is different from not being able to pay your taxes. If you cannot pay but still file a return, the IRS is more likely to work with you on a payment plan or another option to help reduce the burden. If you simply don’t file a return at all, you could find yourself in trouble.
Aiding Someone in Evading Taxes
We already discussed that attempting to evade the payment of taxes can lead to serious charges and put you behind bars. You might not have known, however, that you could end up in jail even if you are not the individual committing the tax evasion. That means that even if you properly file and pay your taxes, you could still face charges of tax evasion if you help someone else to evade taxes. Aiding someone in evading taxes can lead to three to five years of prison time depending upon the actions you committed.
Statute of Limitations
Now that we know what kind of actions can lead to jail time with regards to taxes, let’s talk about the statute of limitations on these crimes. In general, the IRS must work to secure criminal charges within three to six years of the time the violation occurred. Keep in mind, however, that the time limit begins when the tax return is filed. If you fail to file a return at all, in other words, then that timer never started. You might not be able to be prosecuted for owing money on a tax return filed 10 years ago, but you can certainly be charged for not filing a return 10 years ago.
Are you worried that you might be facing jail time as a result of actions taken regarding your taxes? If so, reach out to the attorneys at McKellar & Easter, Attorneys at Law. We are dedicated to our clients and will work tirelessly to ensure that they receive the very best outcome possible. You can learn more about Tax Law HERE!