According to FindLaw, tax fraud refers to the willful attempt to elude tax law and deceive the IRS. Though tax fraud can occur in a number of ways, some of the more common forms of tax fraud in California include the intentional failure to file an income tax return, the deliberate failure to pay overdue taxes, the willful omission of income received, making fraudulent or false claims and preparing and filing false returns. Whether you are a business owner or an individual filer, the IRS treats tax fraud very seriously and may dole our criminal and civil penalties to offenders.
How the IRS ultimately treats tax fraud depends on the type and extent of fraud a person commits and the amount of unpaid taxes. If you are guilty of making false or fraudulent statements, you are guilty of a felony and face up to three years of prison and a fine of up to $250,000, or both. If you are a corporation, you may have to pay a fine of up to $500,000.
If the IRS determines you attempted to evade or defeat the payment of taxes, you are guilty of a federal felony. This type of crime carries a prison term of up to five years and a fine of either $250,000 or $500,000, depending on your filing status.
The willful failure to file a return, pay taxes or supply information is a misdemeanor. Upon conviction, you face up to one year in prison and a fine of $100,000 or $200,000, depending on your filing status.
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