There are people who think that tax evasion is no big deal for one reason or another. While they are few and far between, they do exist. There are also those who neglect to pay taxes without really knowing what they are doing. Of course, ignorance is no excuse in the eyes of the law.
Tax evasion is when a person purposefully underpays his or her taxes. This is not the same as making a mistake on your tax return, such as accidentally claiming a credit or deduction.
One of the most common types of tax evasion is underreporting income. This means you are willing to pay taxes on some of your income, but you hope to hide the rest from the IRS and other taxing authorities. While anybody can attempt to hide income from the IRS, those who deal largely in cash, such as hairdressers and waiters, are more likely to take this action.
Another type of tax evasion is associated with businesses that inflate their expenses. By doing this, they owe less in taxes.
It is easy to believe that you can get away with tax evasion, and this is even possible for some time. However, the IRS typically catches up with people who are involved with such activity.
Since the IRS is aware of tax evasion, since this means they are losing money, they often target people who are not guilty of fraud. As a result, a person is put through the “ringer” when they did nothing wrong.
Simply put, you should never do anything that can be construed as tax evasion.
Source: FindLaw, “Tax Evasion,” accessed Jan. 07, 2016