Federal Income Tax Laws for Not Paying Taxes
Federal income tax laws regulate who is responsible for paying taxes, be it an individual or a business. These laws also state what penalties and charges can become your burden when you do not pay your taxes. While laws exist for you to reduce your personal and business income to decrease your tax burden, non-payment of your taxes altogether is against the law. Three primary laws exist for not paying your taxes, and include fines and criminal charges.
Tax evasion is the broad term to describe cheating on your taxes in various ways. Cheating on your taxes is a felony act. Punishment for tax evasion, which includes not paying your taxes, can result in you spending up to five years in a federal prison. The federal government can also require you to pay fines of up to $250,000 for an individual and $500,000 for businesses.
Filing False Returns
The second primary law for not paying your taxes is when you purposely file false or inaccurate tax returns. This can include purposely using misleading or incorrect information. The filing of false tax returns is a felony. The crime of filing a false tax return can carry both a monetary and prison time punishment. Knowingly filing false returns can land you in a federal prison for up to three years, and requires individuals to pay fines of up to $250,000 and businesses to pay fines of up to $500,000.
Not Filing Taxes
The third law that applies to not filing tax returns at all is a misdemeanor rather than a felony. Since not filing a tax return is the least serious of the three crimes, it also carries the least in punishments. If you do not file a tax return, you may spend up to one year in prison or pay fines of up to $100,000. Businesses may pay fines of up to $200,000. In addition, you must pay all of the taxes you owe.
Kristie Lorette started writing professionally in 1996. She earned her Bachelor of Science degree in marketing and multinational business from Florida State University and a Master of Business Administration from Nova Southeastern University. Her work has appeared online at Bill Savings, Money Smart Life and Mortgage Loan.