Advance notice could help avoid allegations of tax evasion
Due to the increased stress that may come with tax season, filers could stand a greater chance of making errors or mistakes on their returns. As described by Bankrate.com, an individual may also face allegations of tax evasion for a number of reasons, including a misinterpretation of the law.
Cash income and deductions that do not correlate with an individual’s profession may raise red flags. Taxpayers are, however, generally advised of an impending investigation. This may help prepare an individual to defend against a prosecutor’s attempt to convince a court of intentional evasion.
Serious penalties may result from a conviction
An individual charged and convicted of felony tax evasion could face serious punishment. As noted by H&R Block, a judge may order a prison sentence of up to five years. A sentence may also include an expensive penalty.
Officials may make an exception when deciding whether to prosecute an individual when proof exists of an honest mistake. A well-prepared response to a notice of investigation may effectively demonstrate an unintended filing error or miscalculation.
Florida man’s obstruction of tax collection efforts results in imprisonment
As reported by Spectrum News 13, a federal judge sentenced a 67-year-old Florida resident to three years of imprisonment after the IRS attempted to collect more than $400,000 in taxes he owed. Through paycheck garnishments and liens, the taxpayer could have paid the amount owed. He instead allegedly obstructed collection efforts through complicated mail-forwarding arrangements and false claims of exemptions.
An investigation may alert an individual that tax officials found questionable filing information on a state or federal income tax return. Before complying with a collection agent’s request for clarification, an experienced attorney could provide valuable guidance. To learn more, see our page on taking early action to avoid possible charges.