What is the Average Jail Time for Tax Evasion in the US?
Published January 7th, 2020
One of the most-feared situations of most people is having tax problems with the IRS. Most people think that not filing taxes on time and accurately means jail time.
Well, it’s true. The average jail time for tax evasion in the US ranges between 3 to 5 years, plus the fines that come with it. The IRS states,
“Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”
It looks like the IRS is pretty serious about tax evasion. But, truth be told, not everyone who doesn’t pay their taxes gets sent to jail. Some people who really can’t pay their taxes are not forced by the IRS to pay.
However, if you can afford to pay your taxes but you deliberately not to, then IRS can and will file charges against you.
Types Of Tax Evasion
The IRS will have to conduct an investigation first before they can accuse you of tax evasion. As many people say, “innocent until proven guilty.” Here are some examples of tax evasion practices:
- Failure to file returns
- Failure to pay employment withholding taxes
- Filing of false returns
- Overstating tax deductions
- Understating income/assets
- Sales tax fraud
Once you’re proven guilty with these practices, IRS can pursue in charging you of tax evasion.
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Tax Evasion vs. Tax Avoidance
Some people confuse tax evasion with tax avoidance. Both might seem the same, but these two are very different from each other.
Tax evasion is purely and will always be illegal. It uses unlawful acts and methods to avoid proper taxes.
On the other hand, tax avoidance uses legal means to lower your obligations as a taxpayer. For example, involving yourself in a charity that is an approved entity lessen your taxes. Putting your income to tax-deferred investments can be a method as well.
Deferring your taxes through IRA or 401k, you can delay the payments of your taxes until the funds on the investment are already available.
Is Tax Evasion A Criminal Offense?
Unlike FBAR violations and tax frauds which are only considered as civil offenses, tax evasion is a criminal offense. (Related: Top Five Prisons For White-Collar Criminals)
Therefore, the government should prove that you are guilty beyond a reasonable doubt.
But as mentioned earlier, not every tax evaders are being sent to jail. Just because the IRS can pursue a criminal action doesn’t mean that they will.
IRS only has limited staff and resources. With lots of tax evaders in the US, IRS often resort to civil investigations to save time and resources and see where it gets.
What You Can Do
There are ways on how you can prove that you’re innocent and somehow made a mistake in filing your taxes. Seeking help from a criminal defense attorney is always best for they can give you the best advice to avoid being a convicted felon. (Related: Average Jail Time For California Burglary Offenses)
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About The Author
Judy Ponio is a professional writer for the GlobalTel blog. She works hard to ensure her work contains accurate facts by cross checking reputable sources and doesn’t settle for less. Her passion for telling stories about true crime and criminal justice has allowed her to create hundreds of articles that have benefited millions of people.
