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What does the IRS say tax evasion looks like?

On Behalf of | Jun 4, 2020 | Tax Evasion

Most Massachusetts residents do not want to tangle with the IRS. They make sure they get their tax returns filed on time and diligently try to report all their income and let the chips fall where they may. However, that does not mean that people want to pay more in taxes than they absolutely have to. According to the nation’s taxing authority, some people go too far in attempting to avoid it. This is where allegations of tax evasion often arise.

When it comes to evading taxes, the IRS looks for certain signs that someone is supposedly attempting to defraud the government of what it says are the rightful amounts people owe. In approximately 84% of the cases, the agency says that people failed to report all their income. The question is whether it resulted from a mistake, bad advice or a calculated action. The remainder of individuals the agency accuses or suspects of tax evasion either failed to file a return at all or filed a return including all their income but failed to pay all taxes owed.

It may not surprise Massachusetts residents that the people most often accused of tax evasion are wealthy and the self-employed. Apparently, the IRS says that when no third-party is reporting income, such as those working for non-profits or companies, the instance of underreporting income is around 63%. Another area where it appears people are attempting to evade taxes is when they claim the earned income credit without having the right to do so, but this falls more into the tax fraud category.

In any case, individuals who end up accused of tax evasion by the IRS could face both civil and criminal penalties depending on the situation. Those who receive notifications from the agency that they are under investigation should not take the situation lightly. Instead, they should take steps to protect their rights and address the situation as soon as possible, which would most likely include enlisting the aid of an experienced tax attorney.


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