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Failure to File Taxes: The Element of Willfulness

August 20, 2012


It isn’t only tax fraud that can result in criminal tax charges. Failure to file an income tax return at all can do so as well.

From time to time, the defendants in such cases are high-profile people. A recent example is the actor Wesley Snipes, star of “White Men Can’t Jump” and other films.

On February 1 2008, Snipes was convicted of three misdemeanor counts of willfully failing to file federal tax returns. Nearly three years later, on December 9 2010, he began serving a prison term. He is now at a federal prison camp in Pennsylvania, with a projected release date of July 19, 2013.

Snipes apparently bought into a bogus argument that only income from foreign sources is taxable. That is simply not the case; taxable income is taxable income, no matter where it is earned. And everyone whose income is above a given level must file a tax return each year with the IRS.

Snipes could have faced even heavier punishment if he had filed a fraudulent tax return. Under federal law, failure to file is classified as a misdemeanor. A false filing, however, is considered to be felony.

Amended Tax Returns

Fortunately, the presence of mistakes does not necessarily mean that the IRS will view a timely return as a false one.

But if a taxpayer has knowledge that a return is inaccurate, it is important to file an amendment to it right away. Otherwise, the IRS could discover inaccuracies in an audit.

Even worse, if you don’t pay the tax the IRS says you owe, the agency may choose to pursue criminal charges.

Source: “Wesley Snipes Turns 50 in Prison But Didn’t File False Tax Return,” Forbes, Robert W. Wood, 8-1-12

•· Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit our page on failure to file.

Tax Crimes