Sometimes people pay penalties and fines for messing up on taxes, other times they go to jail. What's the distinction?
2007-04-10 08:31:14 · 4 answers · asked by Joe L 4 in Business & Finance ➔ Taxes ➔ United States
When you do the tax evasion thing, you are avoiding the paying of the taxes. ie- not reporting income.
When you do the tax fraud thing, you are reporting something that is not correct and verifiable to usually pay a lesser amount in taxes. ie- not reporting all of your income.
This is not to be confused with filing or not filing the taxes.
Hopefully this helps.
2007-04-10 08:41:02 · answer #1 · answered by kam 5 · 1⤊ 0⤋
Tax evasion is a form of tax fraud. Lying on taxes to get money you don't have coming legally is another form of tax fraud.
People who just make a mistake, or try to pull off something that's fairly minor, are likely to get financial penalties. Only the major cases usually end up with jail time.
2007-04-10 08:52:15 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
They are actually pretty lenient as far as tax evasion goes...it means that you didn't pay one year, or several years as the case may be. They won't fine you or give you a penalty beyond what you actually owe unless it looks like you were trying to lie about what money you made and aren't reporting your income accurately. Even then, they will basically just send you a notice to pay if they've caught it. Penalties are pretty minor and are usually based on your income, so you're really not going to go bankrupt if you've screwed up a bit and it wasn't on purpose. They aren't going to spend time and money suing you unless your fraud is very obvious. Example: If you happen to be a player in the NBA and try to say that you made $4 this year. I hope that helps!
2007-04-10 08:47:02 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Evasion is not paying at all and fraud is lying or cheating on your return.
2007-04-10 08:37:04 · answer #4 · answered by Anonymous · 0⤊ 0⤋