Typical sentences for tax evaders are probation, imprisonment, fines and restitution, according to CriminalDefenseLawyer.com. Prison terms may be up to five years. Fines can be up to $250,000 for individuals and $500,000 for corporations. Courts may order individuals convicted of tax evasion to pay the costs of their prosecutions.
Tax evaders are guilty of committing a felony, so they lose the right to vote and hold office, lose the right to own firearms and may lose professional licenses, says CriminalDefenseLawyer.com. In addition, tax evaders may also suffer a loss or reputation and reduced employment prospects due to their felony records.
Tax evasion denotes the violation of federal statute 26 USC 7201, explains The Ferraro Law Firm. It is an act of deliberate misrepresentation of taxable income to the Internal Revenue Service. Examples of committing tax evasion include not declaring total income, overstating expenses or deductions, falsely claiming charitable deductions and underreporting property value. When an individual makes a mistake or acts negligently in filing taxes, it is not a felony or misdemeanor, though the government retains the right to penalize the individual through restitution and fines.
For cases under $100,000, the IRS sends notices to individuals that the unpaid tax must be paid immediately, notes FreeAdvice. Refusal to do so results in a formal investigation. For cases larger than $100,000, the IRS may send investigating agents to interview the individual or may press criminal charges.