Small errors on your income tax form are not likely to result in any serious consequences. However, failure to disclose income might.
If the IRS determines that you willingly hid income or failed to file a tax return, it could threaten your future. According to H&R Block, failure to report income can result in federal charges and potential jail time for tax evasion.
The IRS targets those who fail to file a tax return
Many people have a side job to generate extra income. If you file taxes for your main source of income but omit the rest, you could face criminal prosecution. However, it could be months before the prosecution files charges. You may believe that the matter is behind you; meanwhile, the IRS is actively building a case and preparing to charge you.
No matter the income source, IRS receives a Form 1099-INT for interest on your savings accounts and may receive 1099-MISC forms from your side jobs. The federal government has six years to file criminal charges.
The IRS is not above negotiation
Although there are often effective defense tactics possible, avoidance of criminal charges may be an option. Begin by contacting the IRS to discuss the matter. You may be able to negotiate a payment plan for your back taxes.
You likely also face tax penalties, but the IRS sometimes agrees to eliminate these when there is a plan in place for repayment. If you admit to errors and show an effort to repay your taxes, the IRS is more likely to forgo criminal prosecution.
