We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What are the Penalties for Tax Evasion?

Nicole Madison
By
Updated: May 17, 2024
Views: 11,089
Share

Tax evasion is a serious crime, and an individual who commits it is subject to severe penalties. In the United States, a person who commits tax evasion may have to pay a significant fine or face time in prison. In fact, an individual who is found guilty of this crime in the United States may face both types of penalties for tax evasion. For example, some types of tax evasion may require the perpetrator to pay up to hundreds of thousands of dollars in fines, and he may be sentenced to up to five years in prison. Other countries may set different penalties for tax evasion.

In the United States, tax evasion is a felony, which is a serious type of crime. In the event that a person attempts to evade taxes, he may be imprisoned for up to five years or face a fine of $250,000 US Dollars (USD) if he files as an individual. Corporations may face fines of up to $500,000 USD for the same crime. Being required to pay a fine does not mean an individual won’t spend time in prison, however. Instead, it is possible that a person will face both a fine and imprisonment as well as fees for related court costs.

An individual or corporation may also face penalties for tax evasion for willfully failing to collect or pay taxes. As with evading taxes, this crime is a felony and an individual who is convicted of it may face severe tax evasion penalties. This crime carries the same penalties as evading taxes, which are fines of up to $250,000 USD or up to five years in prison. If convicted, a person may be sent to prison and required to pay a fine. Corporations may be fined up to double the maximum amount for individuals.

The crime of committing fraud and including false statements on one’s tax return is also a felony. This crime carries the possibility of not more than three years imprisonment. Individuals and corporations can be fined for up to a total of $250,000 USD for individual taxpayers and $500,000 USD for corporations.

An individual or corporation may also face penalties for tax evasion if he fails to file mandatory tax documents, pay tax monies owed, or provide required information. This is a misdemeanor, which is considered a less serious crime than a felony, but it still carries fines and imprisonment as penalties. In this case, however, the maximum prison sentence is one year and the maximum fine is $100,000 USD for individuals and $200,000 USD for corporations. Taxpayers convicted of crimes in this category may face both fines and prison terms or may be given just one of these punishments.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Nicole Madison
By Nicole Madison
Nicole Madison's love for learning inspires her work as a WiseGeek writer, where she focuses on topics like homeschooling, parenting, health, science, and business. Her passion for knowledge is evident in the well-researched and informative articles she authors. As a mother of four, Nicole balances work with quality family time activities such as reading, camping, and beach trips.

Editors' Picks

Discussion Comments
By Markerrag — On Jul 28, 2014

@Melonlity -- Want to know what the IRS cracks down on the hardest? Withholding taxes. You know, those taxes that employers are supposed to hold out of the employees' paychecks and send to the government.

If a company is caught not doing that right, the owners will be given a little bit more time to pay what they owe before the feds close them down and auction off all the business and (sometimes) personal assets they can grab.

That's a bad deal there.

By Melonlity — On Jul 27, 2014

All of this points out exactly why you shouldn't mess around on your taxes. No one likes paying taxes, but the penalties for trying to avoid what the government claims you are are pretty terrible.

Even if you beat any tax evasion charges, just count on being under close scrutiny by the IRS for the rest of your days. Getting on the bad side of those folks is an awful thing, so avoid doing anything that even looks improper.

Nicole Madison
Nicole Madison
Nicole Madison's love for learning inspires her work as a WiseGeek writer, where she focuses on topics like...
Learn more
Share
https://www.wisegeek.net/what-are-the-penalties-for-tax-evasion.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.