Everyone makes mistakes. Tax evasion is a mistake many taxpayers make to minimize their tax liability. However, after they realize the error of their ways, what are the chances of correcting it without punishment?
Offshore Voluntary Disclosure Program
If you have been using offshore bank accounts to keep money hidden, you may consider the IRS' Offshore Voluntary Disclosure Program (OVDP) to get back into compliance. Under this program, you avoid a heavy penalty and possible imprisonment. However, you will still be charged with a penalty for tax evasion but it is reduced. After disclosing the hidden assets and paying the penalty, you are now compliant with the IRS.
A case of tax evasion can carry up to a five-year prison sentence and/or a penalty of $100,000. Filing a false tax return, using abusive domestic and/or trust schemes, or having unaccounted money in overseas banks are all tax crimes that may attract imprisonment or penalties. To minimize the risk of imprisonment and penalties, it is advisable to consult a tax lawyer. Voluntary disclosure of unaccounted money alone often softens the punishment.
For Victims of Tax Evasion Schemes
For the victims of a fraudulent scheme which promised them a reduction or the elimination of their tax liability, the IRS may ask for the full payment of taxes owed, including interest and penalties, or they may proceed to litigation. Often, the severity of the punishment depends upon the amount of taxes evaded, the severity of the crime and the victims' level of involvement in the fraudulent scheme.
Before contacting the IRS, consult a lawyer to understand the risks and advantages of your case so you are fully prepared.
Labels: IRS, Tax Filing, Tax Scams, Taxpayers