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Jan 24, 2018

Can You Go to Jail for Not Paying Taxes?

Not paying taxes can sometimes just be an accident. Often, we see people who forgot to pay taxes one year. This turns into several years. Then the perso ndoesn’t have enough money to pay what they owe. Now you’re wondering if you can go to jail.

The short answer is maybe. You can go to jail for filing. You can go to jail for lying. The thing you can’t go to jail for – is not having enough money to pay your taxes.

Making a mistake on your tax return won’t result in jail. Most tax liabilities are civil, not criminal. If you’re audited and it looks like you owe, then a civil judgement is placed on you – to get the money. You can only go to jail if criminal charges are filed, and you are prosecuted. The most common tax crimes are those of fraud and evasion. Evasion occurs when you used illegal ways to avoid taxes. Claiming more children than you have is an example. It means you intentionally tried to deceive the IRS. This is different than being confused, and placing numbers in the wrong line.

The IRS is more forgiving when it comes to people who can’t pay, versus non-filing. Late filing penalties are much higher than late payment penalties. The IRS won’t put you in jail for not being able to pay your taxes if you file the return. The follow actions can land you in jail for 1-3 years:

Tax Evasion: If you tried evading the assessment of tax, such as filing a fraudulent return – this can land you in prison for 5 years

Failure to file: Failure to file can land you jail for one year, for each year

Helping someone evade: This can carry a 3-5 year prison sentence.

NYC Lawyers For Failing To File Taxes

Criminal Charges – Statute of Limitations

If the government is interested in filing charges, it has to act fast. Criminal charges can only be brought 3-6 years of the violation. The clock doesn’t start until you file your return.

What if you can’t pay

If you can’t pay, you should consider a payment plan.

You can qualify for an individual installment agreement – if you owe less than $50,000 in tax + interest + penalties combined. This involves regular monthly payments. If you owe more than $50,000, you can still get an installment agreement – but there’s more paperwork involved. You can also setup an offer in compromise – which is an agreement between you and the IRS to settle your liabilities for less than the amount owed.

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Manhattan

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New York, NY 10005

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Queens

35-37 36th St,
Astoria, NY 11106

Phone

888-977-6335

Brooklyn

195 Montague St.
14th Floor,
Brooklyn, NY 11201

Phone

888-977-6335