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Failure to File Can Result in Criminal Charges

There are a number of very good reasons to be accurate and prompt when filing one's tax returns and the Internal Revenue Service attempts to motivate us with either a stick or a carrot. Some people prefer the carrot approach and file electronically early to get a tax refund quickly. Others forgo the carrot and either file late, or don't file a return at all.

Failure to file one's tax return, or the stick approach, can not only result in additional payments via penalties and interest, it can also result in jail time. Recently it was reported that a Rockwall man was sentenced to 30 months in jail for failing to file a tax return, in addition to other charges.

According to news sources, the tax debts the Rockwall man owes date back to 1999. Many people are unaware that when there is a tax debt, followed by an on-time payment for a subsequent year, that the IRS typically applies any payment to the past due amounts first.

In addition to old tax debts, during the tax year 2005, the man earned $160,280 in income for which he owed $34,453.

His 30 months in jail is in addition to being ordered to pay $380,723 in restitution. The three counts for which the man pleaded guilty are:

  • Failure to file an income tax return on or before April 17, 2006
  • Failure to pay the IRS the income tax due
  • Concealing and attempting to conceal income

It is possible to negotiate with the IRS and make arrangements to pay back taxes. An offer in compromise is one option which many taxpayers turn to, although there are others. In many cases it is advisable to have a tax and legal professional negotiate on behalf of the taxpayer.

Source: Herald Banner, "Rockwall man sentenced for tax evasion," Brad Kellar, Sept. 24, 2012

1 Comment

When in debt with the IRS, one's life is made even more difficult because of the rising interest each passing year. Better to file early rather than to receive a letter from the IRS.

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