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What is tax evasion, and what are the penalties for it?

For our readers in Florida and elsewhere who love acronyms, here's one that's been a front-page media mainstay the past couple years: FATCA.

Fleshed out, that stands for the Foreign Account Tax Compliance Act. If you don't have any money invested in banks or other financial institutions outside the United States, you likely haven't heard much, if anything, about this legislation.

If you do, though, FATCA is probably on your radar, as a faint bleep that started a couple years ago and now echoes as a loud and persistent clamoring in your head.

The focal point of FATCA is simple and direct: tax evasion.

In fact, FATCA is just one manifestation of the federal government's unrelenting fixation on tax fraud, specifically, identifying and punishing wrongdoers. The FATCA statutory law is federal legislation that mandates the reporting of foreign accounts and related details to the Internal Revenue Service.

We will sketch the material details of FATCA in a future blog post. We mention it as a prefatory point in today's point to underscore the government's focus on tax evasion generally, especially this time of year.

What exactly is tax evasion?

That might seem a most fundamental -- and, to some people, unnecessary -- inquiry, but, in truth, many people across the country often relate that they aren't sure what distinguishes evasive tax entries and omissions from other forms of fraud or even simple mistakes.

An online overview of tax evasion stresses that the bottom line with this fraudulent activity is quite straightforward and simple. Tax evasion, it notes, "is when a person or a company purposefully underpays its taxes."

We will provide a bit more detail on this subject in our next blog post.

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