Tax season can be a stressful time of year, especially for independent contractors and business owners who are not W-2 employees, and are thus responsible for paying their own taxes. A high tax bill can deplete or even exceed the amount of cash on hand, and simply figuring out what exactly is owed and what deductions are allowable can be a headache unto itself. Both the IRS and the Oklahoma Tax Commission have strategies and protocols to detect underpayment and nonpayment of tax liability, and many individuals and businesses live in fear of a federal or state tax audit. And when the tax authorities do come calling, one question that often arises is whether a person who has failed to pay the appropriate taxes can be sentenced to jail.
Yes, Jail Time is a Possibility for Tax Evasion
The IRS has shown time and again that it is willing to put individuals in prison for actions to evade paying taxes owed. Most people know of the famous story of the federal government going after Al Capone on tax evasion charges because they were unable to pin him on the underlying crimes that led to his bounty, but jail time can ensue even when a person’s income comes from legal sources.
In 1990, all-time MLB hit leader Pete Rose was sent to prison for five months for failing to pay taxes on sales of sports and memorabilia, as well as, you guessed it, betting wins (Rose’s trouble with the MLB Hall of Fame for betting on baseball was a whole separate matter – the IRS’s concern was not with the betting, but the failure to pay taxes on his wins).
In 2008, Blade actor Wesley Snipes was sentenced to three years in federal prison for tax evasion, failing to file returns, and improperly requesting tax refunds, and he did indeed serve his sentence in a Pennsylvania federal prison from 2010 to 2013. Snipes famously attempted to defend himself on the grounds that federal taxes were illegal; note that this was not successful for Snipes or others who have attempted this argument.
Other notorious tax dodgers have, however, avoided prison through efforts to pay the large tax bill they amassed. One famous case is country legend Willie Nelson, who owed $16.7 million to the IRS for years of back taxes. While Nelson did not go to jail, federal authorities raided his home in 1990, eventually taking nearly everything (including a ranch, recording studio, and 20 separate properties) but his lucky guitar Trigger, and Nelson famously recorded an album called The IRS Tapes as part of his attempts to pay his tax bill.
Common Reasons Individuals Go to Prison For Tax Issues
To be clear, the IRS and Oklahoma state authorities understand that people do make mistakes on their taxes, and, in such cases, the proper remedy is for the taxpayer to pay the back taxes along with any penalties, interest, or other fees that might accrue. Furthemore, there are legitimate tax strategies that are meant to lower taxes, and exploitation of such loopholes will, by definition, not result in penalties if they are legal.
That said, common reasons that the IRS or state tax authorities might use to justify a criminal case against a delinquent taxpayer which include the possibility of jail time include:
- Falsifying records to avoid paying the proper amount of tax due
- Failing to file a state or federal tax return
- Assisting another person or corporate entity in evading taxes
If you are currently under investigation by the IRS or state tax authorities for violating tax laws – or believe that you may be in the near future – it is important to work with an experienced criminal defense attorney who can pursue strategies to reach a positive outcome and avoid jail time.
Get Experienced Defense in Your Oklahoma Criminal Tax Prosecution
Oklahoma City criminal defense attorney Patrick Quillian is a former Oklahoma district attorney who relies on his years of experience in prosecuting cases to provide the best possible defense for all defendants. If you are facing criminal charges and/or investigation for tax crimes, contact the office of J. Patrick Quillian, Attorney at Law, today at 405.294.4448 to schedule a free consultation to see what his criminal defense team can do for you.