IRS Myth 9: If You Owe The IRS Too Much Money, You Will Go To Jail

This article is part of our series on the 12 Myths About the IRS That Taxpayers Need To Know.

At my first meeting with a prospective new client, their biggest fear is people is going to jail for not filing tax returns or not paying outstanding debt. As a general rule, all the IRS wants from most people are all of the tax returns and an agreement to resolve the balance owed.

Failing to file a return or to pay taxes are both misdemeanors. Submitting a false return and attempting to evade the assessment or payment of taxes are felonies.

Criminal investigators and federal prosecutors are just too busy to go after most taxpayers. Due to their lack of manpower and funding, they have to pick and choose the cases that they are going to spend their time on. These are the cases that often involve high profile individuals that will serve to send the public a message. They are usually looking for serial nonfilers and nonpayers who owe a very large sum of money. They also target business owners who continuously open new businesses and do not pay their payroll taxes.

Filing false or $0 returns when there is income is a way to get noticed and not in a good way. Tax protestors who believe it is unconstitutional to file and pay taxes are also on their radar.

There are 250 million personal and business tax returns filed annually. About 4,000 are investigated and only about 2,000 are eventually prosecuted.

While there are a relatively small number of criminal prosecutions each year, when they set you in their sights, they almost always win. The odds are still in your favor that the IRS only wants your money. The key is to get your IRS problem under control.

Remember, you never know who the IRS will pick on. Be safe!