Myth: The only charge the IRS could charge a person with that could possibly lead to jail time is tax evasion.
Answer: FALSE. When the IRS prosecutes, tax evasion is not always the only charge (if it's charged at all). In fact, there are cases where the person who has been found guilty of one crime may also be charged with violating other laws. The Justice Department asks the prosecutor to choose a "lead charge" in all the cases they present. Here's a list of some of the "lead charges" that are often brought to court in IRS cases:
Conspiracy to Defraud the U.S: Entering into an agreement or conspiracy with another to cheat the government out of taxes deceitfully. The penalty – up to 10 years in prison and/or a fine.
Fraud & False Statements: knowingly covering up a fact by using a trick, scheme or false writing or document. The penalty – up to 5 years in prison and/or a fine.
Willful Failure-To-File: the willful failure to pay the estimated tax at the time required by law. The penalty: up to one year in prison and/or up to $25,000 in fines ($100,000 in the case of a corporation).