IRS Tax Lawyer
Many people turn to financial planners to help them invest their money and make those funds grow. Financial investing is a smart way to build up one’s savings for retirement, a second home, or children’s college education. The only downside to being successful in earning money is that it often increases one’s income tax obligation because the extra funds may put the individual in a different tax bracket.
While the majority of these individuals will report all income on their income tax returns and pay what they are required to, there are people who fail to report certain income and this can and often does lead to serious penalties and other consequences. This failure to report income is legally referred to as tax evasion.
A person can be charged with tax evasion if they fail to report or misreport their income, deductions, or credit on their tax returns. Failure to file a tax return can also result in being accused of tax evasion. Once caught, the more steps the person takes to hide their income and assets to avoid paying the back taxes they owe, the more severe the consequences can be.
In these situations, the IRS will diligently examine the person’s financial life to see if there have been false statements that have been made, unreported income, or if the person is intentionally hiding any records in order to avoid payment of taxes.
One of the most common forms of tax evasion is when an individual attempts to hide income from a second job. Under the law, any income from jobs needs to be reported on taxes, but many people will only report the income from their main job and fail to include the income from the second job in order to avoid paying the taxes due on that extra income.
However, the employer or client the individual earned the income from the second job from is required to file any wages they paid to the IRS, so it is very likely that the federal agency will eventually discover that extra income and send an audit letter to the individual. At this point, if the person attempts to hide bank accounts and makes false statements, they can be charged with the crime of tax evasion.
The penalties for tax evasion or tax fraud vary. The person will be required to not only pay the taxes owed, but there will also be high interest, as well as penalties included in the amount, which can add thousands and thousands of dollars to the original tax amount due. There is also the possibility of a jail time of up to five years.
Anyone who has been charged with tax evasion or tax fraud should contact a skilled IRS tax lawyer in Baltimore, MD, like one from Crepeau Mourges, immediately. The consequences of a conviction can have a serious impact on the person’s life, including loss of future employment and financial devastation.