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Tax Evasion Statute of Limitations: What to Know

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According to the U.S. Sentencing Commission, fewer than 400 people are sent to jail each year for committing tax fraud. That’s an incredibly low number when you consider that 330 million people live in the U.S. right now.

It might lead you to believe tax evasion isn’t that big of a deal in this country. But that isn’t quite true. The Internal Revenue Service, or the IRS, believes there are millions of Americans breaking tax laws and committing crimes like tax evasion every year.

Are you one of them? If so, knowing the tax evasion statute of limitations is important. You should be aware of how long the IRS might be able to come after you for not filing your taxes.

Learn more about the tax evasion statute of limitations below.

To Start, What Is Tax Evasion?

Before we get into discussing the tax evasion statute of limitations, we want to make sure you know what tax evasion is. Although many Americans have heard the term used before, they’re not always sure what it entails.

Tax evasion is an act that people commit when they fail to go through with filing taxes each year. Some people will forget to do it, while others will try to get one over on the IRS by not filing any taxes in April.

Either way, the IRS doesn’t take too kindly to this. If you aren’t filing taxes, you also aren’t paying taxes, and that’s a big no-no in this country.

What Are the Tax Evasion Statute of Limitations?

If you didn’t file your taxes a few years ago, you may have already been contacted by the IRS about it. But if you somehow managed to fly under the radar and not raise any red flags at the IRS offices, you may be wondering what the tax evasion statute of limitations is.

It could be more difficult to answer this than you might think. Generally speaking, the statute of limitations for any tax fraud case is 3 years. The IRS is legally allowed to audit any taxes you’ve filed over the last 3 years and question you more about them.

There are, however, some instances in which the tax evasion statute of limitations can extend for longer than 3 years. If, for example, the IRS audits you and finds that you committed tax fraud or tax evasion, then the statute of limitations can go back 6 years and sometimes even further than that.

Bottom line: If you committed tax fraud or tax evasion, and it was anytime within the last decade, you could potentially have a problem on your hands. You shouldn’t ever assume that the IRS won’t come knocking and want to know more about you not filing taxes.

What Are the Tax Evasion Penalties?

If you get caught committing tax fraud, this will be a felony. You could end up facing big fines and possibly even jail time and/or probation if you get convicted of tax fraud.

The tax evasion penalties don’t take things quite that far. But they can also be pretty harsh if you aren’t careful.

Thankfully, not filing taxes will only be a misdemeanor crime. You will, though, need to file the taxes you didn’t file and pay your subsequent taxes plus any interest and fees you may have racked up over the years.

If you don’t do this, tax evasion could be turned into a felony crime, in which case you’ll still owe taxes to the IRS and you’ll also be subjected to additional fines and potentially jail time and/or probation.

It’s best to steer clear of finding yourself in the second scenario we just laid out. Visit this link to see how IRS wage garnishment might be used to clear any tax-related debts you have.

Why Is Tax Evasion Punished So Harshly?

There is a reason why the IRS comes down so hard on those who commit tax evasion. It’s because they don’t want to give people the slightest impression that committing tax evasion or other forms of tax fraud is okay.

The IRS also punishes those who commit tax evasion harshly to secure the money they’re owed and to prevent people from entertaining the idea of ever committing tax evasion again.

How Can You Avoid Committing Tax Evasion?

The good news for you is that you don’t have to ever put yourself in a position where you need to be concerned about the tax evasion statute of limitations catching up with you. You can avoid committing tax evasion without too much effort on your part.

All you’ll need to do is make it your mission to pay your taxes on time every single year. Furthermore, you should set out to work with a tax professional to make sure your taxes are always filed correctly using the right information.

As long as you do these things, you shouldn’t have to be stressed out over the IRS possibly coming after you. You’ll have all the proof you need to show them you’re an upstanding citizen who pays your taxes.

Follow the IRS Tax Laws to Stay Out of Trouble

You probably don’t know about all the individual tax laws on the books these days. But that doesn’t mean you can’t follow them.

Most of the tax software on the market is designed to help ordinary people file their taxes without breaking any tax laws. You can also work closely with an accountant to file your taxes and let them make sure you don’t break tax laws.

By doing these things, you’ll sleep better at night knowing you won’t have to spend any time thinking about the tax evasion statute of limitations.

Browse through our blog to read more informative articles like this one.


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