Can I Be Charged With a Crime for Not Filing Taxes?

Under federal law, any taxpayer who has earned more than a statutorily mandated minimum amount of gross income must file a tax return. Failure to do so could result in sanctions. According to the Internal Revenue Service (IRS), the most common penalty is the five (5) percent failure to file penalty — for each month taxes remain unpaid, up to 25 percent of the total amount due. Beyond that, failure to file could be a criminal offense. Here, our Chicago criminal tax defense attorneys provide an overview of federal penalties for not filing taxes and discuss the more serious offense of felony tax evasion.

A Basic Overview of Criminal Tax Charges

There is a relatively common misconception that you cannot be charged with a crime for simply not filing your taxes. The reality is this is simply not true. The federal government can bring a criminal charge against an individual taxpayer who knowingly failed to file their tax return in violation of their legal obligations. More specifically, you could be charged with a criminal offense for:

  • Willful Failure to File (Misdemeanor): Willful failure to file your tax return can be charged as a misdemeanor criminal offense. Under 26 U.S. Code § 7203, willful failure to file a tax return is punishable by a maximum of a $25,000 fine and one-year imprisonment.
  • Overt Act of Evasion (Felony): The more serious criminal tax offense — a felony — requires prosecutors to prove the accused made an “overt act of evasion.” As an example, if a person intentionally files an incorrect tax return to reduce their liability, they may face felony tax fraud charges.

Failure to File is Typically Handled as a Civil Matter

Although willful failure to file taxes is a criminal offense, it is important to emphasize the authorities will almost always handle these cases as civil issues. It is quite rare for a person to be criminally prosecuted for not filing their tax return — assuming no other action was taken to evade their financial obligations. Most often, the IRS will handle failure to file cases by sending a demand for payment, eventually taking enforcement action to collect on overdue taxes. If the agency believes a person took overt steps to evade taxes, they are far more likely to face a criminal investigation. If you need to file taxes for past years, you should consult with an attorney. A lawyer can help you ensure old returns are filed in a manner that best protects your rights and interests.

Call Our Chicago, IL Criminal Tax Defense Lawyers for Help

At North Suburban Legal Services LLC, our Illinois criminal tax defense attorneys are experienced, solutions-driven advocates for clients. If you have questions about not filing taxes or tax evasion, we are prepared to help. For a completely confidential case assessment, please contact us today. We represent clients throughout Northern Illinois, including in Cook County, Lake County, Will County and McHenry County.

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