Taxes can be stressful because of the consequences that accompany inaccurate or late filing. Many wonder about tax evasion penalties and whether the average person can face criminal charges for failing to file or filing an incorrect return.
So, can you go to jail for not filing taxes for three years? The answer is complicated and varies depending on the details of your situation.
For the average person, failing to file taxes for three years will not likely lead to IRS criminal charges if, for instance:
It is important to understand that mistaken misfilings are not criminal and that accidental filing issues are more likely to result in tax assessment, fines, late fees, and a loss of any applicable refund. Taxpayers must file their refund request within three years to qualify for the payment. The IRS will not pursue criminal enforcement against those who cannot afford to pay their taxes.
Taxpayers who fail to submit their return may face a substitute return request, resulting in a significantly more expensive tax bill to compensate for the missed filing.
IRS non-filer enforcement only pursues those who willfully attempt to evade taxes or defraud the US government. In these cases, the average taxpayer may face jail time for tax delinquency, even with an average income. It is essential to comprehend the consequences of willful tax fraud or evasion, as these penalties can range from financial penalties to imprisonment, depending on the severity.
Willfully failing to file (or filing with inaccurate information) can result in either misdemeanor or felony charges. Misdemeanor charges involve fines of up to $25,000 and up to a year in prison, while felony tax evasion involves fines of up to $100,000 and up to five years in prison. The court can find someone guilty of multiple counts of tax fraud, which can compound the prison sentences possible for criminal tax evasion.
To be charged with a felony for not filing taxes, the willful tax evasion must involve attempts to dodge significant tax charges. For example, it is evasion if someone owes the IRS hundreds of thousands of dollars after filing returns for several years without paying and then attempts to avoid paying the full amount owed by transferring assets without proper documentation to the IRS. Filing returns with inaccurate or incomplete information counts as “tax fraud” because it involves the willful filing of fraudulent information.
It can be helpful to work with a qualified tax attorney to stay on top of tax deadlines and ensure all your provided information is accurate and comprehensive. A tax attorney can also help those facing an IRS audit or penalties for late or missed returns.
Levy & Associates is a tax consultancy that helps individuals and businesses to properly file their tax returns and remain compliant with state and federal regulations. Working with a knowledgeable tax attorney or accountant can help taxpayers feel supported through the return filing process and ensure they include complete and accurate income records.
A tax professional can help taxpayers understand which deductions and exemptions they qualify for and may help prevent potential penalties.
Now that you know the answer to “Can you go to jail for not filing taxes for three years?” it can be helpful to work with a tax attorney to assess your situation.
To schedule a consultation, call 877-620-6490 or contact Levy & Associates online.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.