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“File a false amended return, including a false tax refund claim of over $4 million for the year 1996, and a false amended return, including a false tax refund

“File a false amended return, including a false tax refund claim of over $4 million for the year 1996, and a false amended return, including a false tax refund claim of over US$7.3 million for the year 1997.” That’s from the Wikipedia page about Wesley Snipes. That’s what it takes to get the IRS to really go after you. Not only do you have to do it intentionally, but when you get caught you need to hold the line and say that you refuse to pay. If you make a “mistake” and claim more deductions than is reasonable or just outright fail it file once or twice nothing really happens. They just try to correct the “mistake.” They try to settle or put you on a payment plan or maybe try to garnish your wages if you don’t respond. When the IRS goes after tax fraud they are looking for someone trying to claim a multimillion dollar 2nd home in the Hamptons as a business expense, not someone who says they bought more office supplies than they really did. Or when someone with no kids tries to get multiple child tax credits. When you get audited (by the IRS or anyone, really), they will ask you for a bunch of documents and then come up with their own calculation based on what they believe you owe. You can pay it and be done with it or dispute it. If you dispute it, then it may become contentious. Only then does it even really become an issue. At the end of the day the “standard” is whatever a judge decides is reasonable, should it even rise to that level. But it almost never makes it that far because someone settles. Generally speaking, the only people who go to prison over tax fraud are those who CAN pay but refuse to.

dragonwriter 8y ago
> At the end of the day the “standard” is whatever a judge decides is reasonable. Because fraud is criminal, in practice the standard is whatever a jury would find willful beyond a reasonable doubt (or, perhaps more to the point, whatever the US Attorney can convince you and your attorney that a jury would be unacceptably likely to see that way.)
Gibbon1 8y ago
My mother worked for the IRS (ducks thrown shoes). And then worked as a personal and small business tax accountant. From her experience from working both sides. Criminal prosecution happens when people repeatedly challenge the IRS's authority with intent to defraud[1]. Like if they catch you actively[2] illegally hiding income, they fine you. And then find you're right back at it. Otherwise penalties and interest are simply mechanical and based on the amount not squared up for the fiscal year. [1] You can bitch about the IRS all you want and they don't care as long as your taxes are in order. [2] Meaning you are doing things to hide assets and income that proves intent to defraud the government. Merely not reporting or failing to record income tends not to count.

dragonwriter 8y ago

> At the end of the day the “standard” is whatever a judge decides is reasonable. Because fraud is criminal, in practice the standard is whatever a jury would find willful beyond a reasonable doubt (or, perhaps more to the point, whatever the US Attorney can convince you and your attorney that a jury would be unacceptably likely to see that way.)

Gibbon1 8y ago

My mother worked for the IRS (ducks thrown shoes). And then worked as a personal and small business tax accountant. From her experience from working both sides. Criminal prosecution happens when people repeatedly challenge the IRS's authority with intent to defraud[1]. Like if they catch you actively[2] illegally hiding income, they fine you. And then find you're right back at it. Otherwise penalties and interest are simply mechanical and based on the amount not squared up for the fiscal year. [1] You can bitch about the IRS all you want and they don't care as long as your taxes are in order. [2] Meaning you are doing things to hide assets and income that proves intent to defraud the government. Merely not reporting or failing to record income tends not to count.