Crossing The Line – Felony Tax Crimes
By Lynn K. Ching So when does failing to file a tax return or not accurately reporting income and expenses on a return, cross the line - from the civil to the criminal arena? Why is it that one person gets assessed an accuracy related penalty for not correctly reporting his income and expenses, while another goes to jail for doing - seemingly - the same thing? Following is a brief discussion of crossing THAT ‘line’. Failure to File + More = Tax Evasion - 26 USC § 7201 While failure to file a tax return is generally a misdemeanor, failure to file a return + 2 “more” (discussed below) is a felony. Under 26 USC § 7201, the willful attempt to evade or defeat the assessment of taxes or…