Tax evasion has become a widespread problem for the federal government. Every year, tax evasion cost the US government an estimated $350 billion in unpaid taxes. Additional tax burden due to tax evasion has to be borne by honest Americans who pay the taxes every year. If you are San Francisco, Oakland or Fremont, never ever subscribe to a tax evasion scheme, if you really care for the country.
Tax evasion not only creates deficit in the federal and state budget but also hampers public services supported by tax dollars. Moreover, tax evasion schemes will lead you to problems with the IRS, the result of which may be civil or criminal penalties or both.
According to the IRS (Internal Revenue Service), small business and sole proprietorship owners as the largest contribute most to that tax gap created by tax evasion. That is why; it has been cracking down on both small businesses and individuals who have been involved in tax evasion schemes. The IRS is increasing its IRS tax audits and aggressive collection tactics, and it is getting stricter for the tax evaders.
Tax evasion is a criminal activity and it's not the same with tax avoidance. Tax avoidance is legal and is the way to reduce the amount of taxes payable working within the existing laws. However, involving in tax evasion activities will definitely create bigger problems for you and your business and future.
Tax evasion will generate several red flags which are evident to the IRS. IRS has IRS tax audits to find out the tax payers who are indulged in tax evasion.
Tax evasion is cheating of the government. This is considered as a felony and it may attract up to a 5-year prison sentence. It can also attract penalties up to $100,000.
There are other legal ways to reduce the amount of tax you have to pay every year. Legal tax deductions are available for reducing your tax amount.
Tax evasion schemes become costlier because they not only attract penalties but also may result in heavy fines on you and our business. If you have back taxes and other tax problems, then it is possible to negotiate a tax relief and Offer in Compromise. Getting into tax evasion schemes and attracting aggressive IRS penalties and collection may destroy your financial life.
An experienced IRS licensed enrolled agent, CP or tax lawyer will give you the right advice to avoid such tax evasion schemes for your own benefit.
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