3 Reasons to Avoid Cheating on Your Income Tax Return Federal and state taxing authorities can detect errors and misstatements with ease, speed, and accuracy – a reality which is reflected in the 91.2% conviction rate achieved by the IRS Criminal Investigation division (IRS-CI) in 2019.
If the IRS does detect any issues, such as tax credits that were improperly claimed, or foreign bank accounts which have not been reported, there could be numerous civil and criminal tax consequences for the taxpayer.
Reason #1: You Could Go to Prison
Tax fraud carries with it a risk of prison time. "Tax fraud" encompasses a host of tax crimes including:
Reason #3: You Could Be Ordered to Pay Fines Prison time is seldom the only consequence of tax fraud. In addition to restitution, you could face criminal fines under 26 U.S. Code § 7201 of $100,000 for individuals and $500,000 for corporations.