Question

What is the applicable length of time for the statute of limitations on assessment of taxes if the taxpayer willfully evades taxes? Explain!

Answer 1

Ans)

There is no limitation on the statute of limitations if the taxpayer willfully evades taxes

False, Fraudulent, or Missing Returns: No IRS Statute of Limitations

It is also important to note that no deadline applies where the IRS can establish that a taxpayer has: 1) filed a false or fraudulent return; 2) willfully attempted to evade tax; or 3) failed to file a return. Unlike the circumstances above where tax returns are filed (even with errors), these are cases in which a taxpayer is willfully or intentionally not filing taxes or is filing fraudulent return(s). Not only will there be no time limit on IRS action against such taxpayers, but heightened interest fees and penalties will apply.

Worse yet, tax fraud and evasion are criminal violations and offenders face the prospect of fines and jail time if the government seeks to prosecute them for the offenses. Nevertheless, every year thousands of individuals fail to pay their taxes, but the IRS usually prefers to resolve tax problems outside of the judicial system in most cases. Coming forward voluntarily and cooperating with the IRS to determine any taxes that are due and establishing a payment plan is sometimes a good way of both avoiding criminal liability and getting back in the relative good graces of the IRS.