While tax avoidance is defined as the legal practice of finding loopholes to lower a tax bill, tax evasion describes illegal methods of manipulating finances to lower a tax bill, notes Christopher Bergin for Forbes. Government bodies, such as the Internal Revenue Service, pursue and prosecute cases
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 word "evasive" is an adjective that describes a person acting or speaking in a manner aimed at avoiding something, such as evading the truth or evading capture by the police. It may also describe avoidance tactics using objects, such as flying a warplane in an evasive manner.
In 1952, former IRS commissioner Joseph Nunan got in trouble for tax evasion. In an odd twist, his problems were not due to corruption or hypocrisy but a simple misunderstanding over $2,000. He won a bet on a presidential election and forgot to claim the winnings on his tax return.
As of July 2015, the 2014 Tax Guide for U.S. Citizens and Resident Aliens Abroad is available for free viewing on IRS website. The website also offers several tax guides for special cases, such as the 2014 Armed Forces' Tax Guide and the 2015 Employer's Supplemental Tax Guide.
The federal tax rate is the percentage at which taxes are paid on income. In the United States, the tax rate varies between tax brackets, or ranges of income amounts. Those in higher tax brackets, who make more money during the year, generally pay a higher percentage of taxes.
The three forms individuals need to use to file federal taxes are Form 1040EZ, Form 1040A or Form 1040, according to the Internal Revenue Service. Individuals need to know what form they are required to fill out according to their financial and personal situations.
Federal income tax returns are usually due on April 15 each year. It may be extended to the next business day if April 15 is a weekend. Payment of any balance owed to the IRS is also due at this time unless a payment arrangement has been put in place.
Where federal tax returns get mailed depends on factors such as where a taxpayer lives and the type of tax return, such as one filed by an individual compared with one a corporation files, says the IRS. Whether a payment is enclosed also affects the mailing address.
Federal income tax is used by the government to collect taxes from individuals and businesses that earn income during the year. This form of taxation includes any income that is earned from work, business or investments. The tax is levied by the Internal Revenue Service.