The IRS is knocking on your door, calling your phone, and sending threatening letters in the mail. You are scared. You may feel overwhelmed. Perhaps you have not filed your tax returns for a few years, or you simply don't have the funds to pay what you owe the IRS. The question on your mind is "Will I go to jail?" My answer is: It depends, and it's good to know that many options are available.
Owing the IRS money is not a crime. However, failing to file at all is. The law states that one year of jail time can be required for each year taxes aren't filed.Tax evasion is a federal offense. Therefore sentencing on such cases can be influenced by the Guidelines established by the U.S. Sentencing Commission. These "Guidelines" list every possible federal violation and rank. The larger the offense, the larger the penalty received. So owing the IRS $5,000 would not be as detrimental as owing $250,000. However, this manual is a only a guideline and judges are allowed to take liberties with what the text suggests.
Every case is unique. It is possible a person may be sentenced to community service, probation, or home confinement rather than jail. Probation is when the offender is ordered to follow certain rules and conditions established by the court and is often supervised by a probation officer. Some of the conditions may include making all computer files, state and federal tax returns, bank accounts and any other investments or financial transactions open to the probation department. "Home confinement" means being forced to stay in one's home or specified location instead of jail. The offender may only leave the location under strict circumstances such as medical emergency.
The best way to ensure staying out of jail is to be cooperative and honest with the IRS and to work with an attorney that knows the in's and out's of tax solutions.. If a person can demonstrate he is taking responsibility for his predicament and is actively working towards a solution the IRS and the courts will tend to be more understanding. The IRS website states:
A long-standing practice of the IRS has been not to recommend criminal prosecution of individuals for failure to file tax returns, provided they voluntarily file, or make arrangements to file, before being notified they are under criminal investigation. The taxpayer must make an honest effort to file a correct return and have income from legal sources. A letter from the IRS concerning taxes is not a notice that a taxpayer is under criminal investigation.
So, how to begin? Filing amended tax returns can be a good step in the right direction. However, it is important to consult with a competent tax attorney because this action is an "admission" of the amount owed to the IRS. Another option is to file a Voluntary Disclosure. This only applies to certain people. Under this program, the IRS offers people with undisclosed income in offshore accounts another chance to get current with their taxes.
The courts consider many aspects of each case when deciding an outcome. For example, the court will take into consideration the details and the nature of the situation as well as the history of the defendant. It may consider the guidelines of the sentencing commission. It will compare the case to other similar cases.
Rest assured, there are many options available to avoid jail. But in any case it is critical to seek the advice of a knowledgeable tax attorney. Call our office today to learn how we can help with your specific case.
