Probably not. The IRS tend to look favorably on tax payers who come forward to admit they made a mistake and, as ruthless as they are sometimes, generally won’t prosecute people just because you don’t have the money.

One of the biggest fears that delinquent taxpayers have is the risk of criminal prosecution or incarceration and it often prevents them coming forward to get their affairs in order.

While this fear is justified to some extent because the IRS do indeed have a lot of power to prosecute tax cheats, in reality criminal prosecution is exercised only in very limited circumstances … normally where the amounts are huge or where the tax payer has refused to co-operate after having many chances to turn their life around!

Recognizing the complexity of federal tax laws, auditors usually assume that a mistake is innocent unless the evidence suggests otherwise. However, some actions clearly constitute fraud because they have no innocent explanation.

If you’re delinquent on your taxes the single best way to avoid jail is to speak to an Enrolled Agent and then work with the IRS to resolve the issue.

If the IRS has already started an investigation then its too late to come forward cap in hand, but by fully co-operating and honestly providing all the information that you are required to by law you will again normally avoid jail time.

If you owe a lot, you might even be able to work out an offer in compromise and settle for less than the full amount. Willie Nelson was charged a back debt of $16.7 million in 1990 and eventually worked out a deal that cut his tab to $9 million (and yes, he stayed out of prison).

Don’t Want To Co-operate With The IRS?

Then we say good luck to you because evading the IRS is like playing Blackjack in Las Vegas. It might look like you’re winning, and indeed you might well win for awhile. But just like Vegas the Casino (IRS) always wins in the long run and the only way to not lose is stop playing.

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