What are the Penalties for Tax Evasion?

N. Madison
N. Madison

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.

Many individuals have been sent to prison for tax evasion.
Many individuals have been sent to prison 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.

N. Madison
N. Madison

Nicole’s thirst for knowledge inspired her to become a wiseGEEK writer, and she focuses primarily on topics such as homeschooling, parenting, health, science, and business. When not writing or spending time with her four children, Nicole enjoys reading, camping, and going to the beach.

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Discussion Comments


@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.


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.

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