Question

"The tax evader is a criminal." Support or refute this statement.

Answer 1

The tax evader is a criminal

Assumption : It is assumed that student asked question based on US Tax Law.

Answer : Tax evasion is using illegal means to avoid paying taxes. Typically, tax evasion schemes involve an individual or corporation misrepresenting their income to the Internal Revenue Service. Misrepresentation may take the form either of under-reporting income, inflating deductions, or hiding money and its interest altogether in offshore accounts.

In the United States, tax evasion constitutes a crime that may give rise to substantial monetary penalties, imprisonment, or both.  Section 7201 of the Internal Revenue Code reads, “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”

The IRS may carry out investigations to determine the correctness of any tax return and collect necessary income tax, including requiring the taxpayer to provide specific information such as books, records, and papers. The IRS whistleblower award program was created to assist the IRS in obtaining necessary information. While these investigations can lead to criminal prosecution, the IRS itself has no power to prosecute crimes. The IRS can only impose monetary penalties and require payment of proper tax due. The IRS performs audits on suspicion of noncompliance but has also historically performed randomly selected audits to estimate total noncompliance; the former audits have much higher chance of noncompliance.

Tax evasion is a felony criminal offense. If you are charged with tax evasion, the United States Attorney’s Office will prosecute you in federal court. The possible civil and criminal penalties for tax evasion are severe. It's also important to understand that you have rights and protections when it comes to the tax collection process.

It's up to the IRS whether it wants to impose criminal tax penalties, civil tax penalties, or both; civil tax fraud can't send any person to jail. However, it can result in a penalty of 75% of the tax due, plus interest.