Most Tennessee residents are fearful of finding themselves on the receiving end of a tax audit, and with good reason. An audit involves the Internal Revenue Service taking a close look at virtually every aspect of your taxes, and if anything appears to be amiss, you could face serious, potentially life-changing consequences. Patrick T. McNally, Attorney at Law, has extensive experience assisting clients with a wide range of white-collar criminal matters and has firsthand knowledge of just how much a tax evasion conviction may upend your life.
According to H&R Block, there are a number of different reasons the IRS may decide to take a closer look at your taxes, but in many cases, the service targets those who do one of two things. They either fail to file a formal tax return at all, or they misreport some part of their income, expenses or deductions.
Failing to report all income is the single biggest issue that is likely to attract the attention of the IRS, and it is always a risky move to underreport or fail to report any income you receive during the year. Why? The IRS typically receives copies of certain documents, such as Form 1099-INT and 1099-MISC, so the service is aware of these income streams, even if you fail to report them yourself.
Just what type of trouble might you face following a conviction for tax evasion? Even if you are able to avoid jail time, you may still face serious financial penalties. In addition to having to pay back taxes on what you owe, you may, too, have to pay a hefty 75% fraud penalty on top of it. If you do wind up having to spend time in jail due to your crimes, you could potentially have to stay there for up to five years. Learn more about white-collar crimes on our webpage.