tax evasion and false filing and failing to file
November 30th, 2006Last post was a news clip of a man failing to disclose all his income in his tax returns, a charge that amounts to possible 5 years in jail and fees under Section 7201. Wesley Snipes has also been charged with evading tax by fraudulently claiming refunds, also an attempt to evade or defeat tax, under Section 7201. Snipes’ contention that he didn’t know of the fradulent claims seems questionable because the prosecutor should demonstrate proof that Snipes knew that his accountant was of the type to make fraudulent claims. Furthermore, Snipes, if he wants to claim innocence, should have always filed his return, or at least ask his accountant why a return was not filed. If you make money in any year (more than the minimum of that year), you must file your taxes. Filing taxes is like breathing, people just do it.
False Filing amounts to tax evasion. The United States works on a ‘volunteer return’ system. This doesn’t mean that the citizen gets to decide whether or not he or she wants to file a return. It should be more properly stated that the citizen must “volunteer up information about their income”.
Failing to File under Section 7203 can amount to 1 year in jail with fines. The IRS normally does not send the average late filer a letter indicating possible incarceration. However, this code section is available for any case the IRS deems necessary. Just because you think that you’re small fry, doesn’t mean that the IRS cannot act Section 7203 on you.
File your taxes.
The IRS allows the taxpayer to arrange his or her deals in the light most favorable to them, i.e. to lower tax liability, but only if the arrangement is legal.
