IRS Tax Audit, Prosecution Can Happen to Anyone
Many people assume that the IRS only goes after celebrities and the rich. But most tax audits and prosecutions involve everyday consumers, not pop stars.
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It can’t happen to me.
I hear that line a lot from my potential clients.
There is a strange perception in the United States that the Internal Revenue Service only goes after millionaires and celebrities.
That perception is dead wrong, of course. But I understand where it comes. When people read the newspapers or watch television, they only hear about celebrities getting in trouble over hundreds of thousands in unpaid taxes. Of course, these celebrity tax stories make for great reading.
The most recent example is singer Lauryn Hill, the former front woman for hip-hop group Fugees. Hill pleaded guilty in New Jersey to not filing tax returns for three years and not paying taxes on $1.8 million in income.
After she was initially charged with tax offenses, Hill posted a rant online in which she criticized America’s “climate of hostility, false entitlement, manipulation, racial prejudice, sexism and ageism.” Hill, who had dropped out of society, said she hadn’t reported her taxes to guarantee her family’s anonymity and safety.
Of course, that’s no excuse. Hill faces possible prison time for not filing taxes.
We hear about cases like hers, because as a culture, we love stories of celebrities in hot water. But that doesn’t mean that the IRS isn’t going after Joe Sixpacks — your friends and neighbors and coworkers.
In fact, the IRS is going after everyday people more aggressively than ever now that Congress has increased the IRS’s budget for enforcement. Every day, average U.S. consumers who are cheating or not paying their taxes are being indicted. Some are being sentenced to years in prison.
The problem is that these cases are not easily found in the news media.
Lauryn Hill’s tax troubles make for great headlines. Your neighbor’s tax troubles? Not so much.
And this fuels the perception that only celebrities and the very wealthy are facing IRS scrutiny.
I think this is a very dangerous perception, because people should realize that if they are cheating on their taxes or not filing their tax returns, they are at significant risk of IRS audit and possible criminal prosecution.
Just take quick review of recent cases.
In Pennsylvania, for example, a woman faces up to three years in prison because she submitted tax returns that significantly under reported the income of her husband’s lawn care business.
In Ohio, a businessman is going to prison for 15 months because he did not pay to the IRS more than $263,000 in taxes his company had withheld from employees.
In New Jersey, the chief of staff of a member of the Municipal Council was sentenced to six months in prison for not filing tax returns.
Perception is not reality.
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I am Michael Rozbruch, a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers and a Maryland CPA. You can contact my office – Tax Resolution Services – at 866-477-7762 to obtain a free subscription to our tax newsletter titled The IRS Times & Inquirer.
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Tags: cheating on taxes, IRS audit, not filing tax returns, tax audit, tax debt, tax evasion, tax offenses, tax resolution services
