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
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.
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
According to the IRS, failure to file taxes can result in severe payment penalties. These penalties can grow on a monthly basis, maxing out at as much as 100 percent of the actual tax monies owed.
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.
Penalties for filing IRS taxes late include a failure-to-file penalty, a failure-to-pay penalty if a taxpayer owes taxes or losing a refund if taxes are not filed within three years. IRS penalties accumulate monthly due to interest on unpaid taxes, and the penalty reaches a maximum at 25 percent of
The Internal Revenue Service generally calculates tax penalty at 5 percent of the unpaid taxes for each part of a month or for the entire month a tax return is late, explains the IRS. The penalty starts to accrue the day after the tax filing due date.
The Internal Revenue Service does not have an online tax penalty calculator. However, the agency's official website lays out guidelines individuals can use to calculate penalties that accrue from filing or paying taxes late, according to the Internal Revenue Service.
Some facts about the death penalty include that as of 2012, the United States was ranked fifth in the world on carrying out the most executions by the death penalty. Since 1973, over 130 inmates have been released from death row with the proof of innocence.
There is both a failure-to-file penalty and a failure-to-pay penalty that can be imposed by the IRS, according to its official website. The failure-to-file penalty is typically more than the failure-to-pay penalty, which is usually half of 1 percent per month on the unpaid tax amount.