You do your best on your taxes, but they are complex. You have multiple jobs, some write-offs and file with your spouse. You don’t usually have to pay, but when you do, you pay whatever you’re told you owe.
That’s why you were shocked when you were informed that you hadn’t paid enough tax. An audit showed that you were behind by several thousand dollars, despite the fact that you felt you did your taxes correctly. Now what? Will you be accused of tax evasion? Will you be in trouble with the law?
Tax evasion is the illegal underpayment or nonpayment of taxes. It’s highly unlikely that you’d face tax evasion accusations in this case, especially since you did file your taxes and had made an attempt to pay in the past. On the other hand, if you intentionally underreported your income, then that could make the Internal Revenue Service (IRS) concerned about potential tax evasion.
It’s most important to realize that mistakes are not the same as tax evasion. There is no question that taxes are complex, and the entire process makes it easy to make errors. The IRS would have to show that you willfully and deliberately tried to underpay your taxes. Without that, you simply made an error.
What should you do if you face an audit or are told you owe?
If you are going to go through an audit, it’s a good idea to get your attorney on board early to protect your rights. If you owe, you may be able to create an offer in compromise with your attorney’s help, so you minimize the additional money you need to pay to the IRS.