Tax Evasion vs. Negligence: Know the Differences to Keep Troubles at Bay

Lying to the IRS about tax returns is an offense punishable with both civil and criminal penalties. Civil penalties would mean hundreds and thousands of dollars fine, whereas criminal penalties may mean spending anywhere between 5 to 20 years in prison. Although evading taxes is a crime, any negligence in filing taxes is considered a mistake. The core distinguishing factor between tax evasion and negligence is the intent of the tax-payer. Taking this discussion further, let’s learn how the IRS differentiates US taxpayers based on their “intent”.

Cause of Non-payment


Tax evasion implies a deliberate act of misrepresenting taxable income to the IRS. A subset of Tax Fraud, the term “tax evasion” is typically used in the criminal context; referring to someone charged with violation of Title 26 USC § 7201. Tax Evasion has various forms, such as willful avoidance of filing a return, paying taxes, and providing tax-related information. In addition, maintaining and showing fraud and false statements, preparing and filing a fraudulent return, and identity theft, are also deemed tax evasion.

The types of fraud IRS auditors are trained to identify include:

  • Two sets of financial books or no books at all
  • Freshly made bogus receipts
  • Checks altered to increase deductions


IRS auditors are intensively trained to find out if they have a case of tax negligence or fraud. In case IRS auditors catch a taxpayer deliberately avoiding tax returns, they are free to impose penalties on the person for making false tax statements. The IRS auditors may even refer the case to the Criminal Investigation Division of the IRS. After completing the investigation of a tax-related case, the US Government Taxation Agency delivers its judgement. If the IRS adjudges that the defendant was “negligent”, they are charged a 20 percent penalty on their tax bill.


Taxpayers in the US need to be fully aware of the differences between tax evasion and tax negligence, to ensure they never find themselves on the wrong side of the law. Taxpayers can use the tax software available at to ensure they accurately file their returns, and find out the claiming tax benefits according to their eligibility. IRS “Free File” option allows taxpayers to prepare and file their tax returns for free. If you or somebody you know is facing changes of tax avoidance or negligence, feel free to connect with the consults at The Law Offices of Nick Nemeth. We will be happy to help.

Rate this post