It’s a crime to try to avoid paying taxes, but many people try to get away with it. Tax evasion refers to individuals attempting not to pay taxes purposefully. People who make mistakes on their taxes shouldn’t face charges for their errors, although they may face financial penalties or the risk of prison if they do not make good on the debt.
Making a mistake on your taxes isn’t tax fraud. People are only human, and it’s understandable that people could make mistakes on their tax documents. The tax code in the United States is complicated, so it’s easy for people to under- or overpay. Don’t worry about being convicted for tax fraud if you made mistakes; tax fraud is typically only alleged against those who the Internal Revenue Service (IRS) believes intentionally tried to avoid paying taxes. The IRS has to show that you were deliberate in your actions to make a charge stick. However, if you’ve only made an error, you’ll likely only have to pay a fine or the balance that you owe.
Tax evasion may involve small amounts of money, like if someone earns but does not report a hobby income. It may also involve large cash values, like in the case of businesses attempting to avoid taxation.
Our website has more information about tax fraud and what you can do if you’ve been accused of committing it. Not all cases of alleged tax fraud are legitimate, and the IRS does make mistakes. You have a right to defend yourself, so you don’t face unfair treatment from the government.