Can I be charged with a crime by not filing?
I have heard that people can go to jail if they fail to file their return.
The short answer is yes, but it is very limited. There is a crime called “willful failure to file”, which is punishable by fine and imprisonment, but this only applies to corporations. The law is located in 26 USC Subtitle F, Chapter 75, but as with the rest of the tax code this can be very confusing.
26 U.S. Code § 7203 – Willful failure to file return, supply information, or pay tax: Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution. In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure. In the case of a willful violation of any provision of section 6050I, the first sentence of this section shall be applied by substituting “felony” for “misdemeanor” and “5 years” for “1 year”.
So first you have to be required to pay the tax in order to be charged with not filing. Evidence from this is usually created by 3rd parties. Without that evidence, you’ll never hear from the IRS. These are the W2s and 1099s which are reported, usually incorrectly calling your property taxable income. The important thing to know is this code includes the word “willful”. This is a very important piece. The Supreme Court has ruled several times that a person’s belief that they did not have to file, no matter how crazy the basis for that belief, negates willfulness. The defense has a right to inform the jury of this, and either the jury or the judge can force a not-guilty verdict if they believe this is the case.
