Unpaid Taxes: Make Sure You Don’t End Up in Jail

Few people set out to get themselves in trouble with Uncle Sam. However, it’s easier than you might think to find yourself on the wrong side of the IRS and facing a world of trouble. It might be a case of forgetting to complete your taxes or submitting them late. There’s also the chance of a simple mistake on a tax return that causes a significant problem.

If something like this has happened to you, it’s best to face the situation head-on and deal with it. The longer you avoid it or pretend it isn’t happening, the less kindly the IRS is inclined to view any attempts to sort the matter out later. Despite its fearsome reputation, the IRS can be forgiving, and a direct approach could avoid criminal proceedings.

How unpaid taxes could land you in jail

Just because you have unpaid taxes doesn’t automatically mean that you’re going to serve jail time. The IRS will not have you jailed because you cannot afford to pay your taxes.

However, if you avoid paying taxes, you might be charged with tax evasion, a crime. If found guilty, you could be subject to severe fines and possible incarceration. Additionally, if the IRS can prove that you actively assisted someone to evade their taxes, you are also liable for criminal prosecution. Deliberately filling in incorrect information on a tax return is another criminal offense. 

Failing to file a tax return is another legal quagmire that could end in jail time. The government is entitled to jail you for one year for each year in which you didn’t file your taxes. If you haven’t filed your tax return, you’ll need to have a substantive reason why.

Legal action over taxes

In these trying economic times, you would want to take advantage of any business tax relief measures put in place by the government. However, you must do so legally, which is why getting help with your tax return can be beneficial.

Most legal action regarding tax matters is civil rather than criminal. Regardless of which you are subject to, you need a tax attorney who can make sure you get the best representation possible. Tax Fortress offers clients sound legal advice when they face court action over unpaid taxes.

Criminal vs. civil cases over tax issues

When it comes to criminal charges, there is a statute of limitations that applies. For tax offenses, the statute of limitations is between three and six years. After that time expires, the IRS cannot file criminal charges against you. 

Civil charges will result in a monetary judgment against you if the court finds you guilty. This judgment allows the IRS to take legal steps to collect the money.

How to avoid jail time over taxes

If something has happened that could result in you going to jail over your unpaid taxes, you need to be proactive. Hire a lawyer to represent you and schedule a meeting with the IRS. Your attorney could negotiate a deal whereby you agree to plead guilty to a lesser offense, pay a fine, and settle your outstanding debt with the IRS. 

If you are unable to pay the taxes you owe, you can seek a compromise with the IRS. This could take the form of an installment plan that allows you to pay the debt off over a specified time. 

However, if you don’t adhere to the agreement, the IRS can seek legal remedies against you. You can also apply for an offer in compromise, where you settle the tax bill for less than the balance. 

  • Categories

  • Archives

  • Latest from Twitter