The majority of IRS cases are civil, meaning taxpayers won't face criminal penalties such as jail time. Civil cases can generally be resolved by filing the required documents, paying taxes and penalties, or working with the IRS to arrange a payment plan.

A civil case can turn into a criminal case when a taxpayer ignores or fails to communicate with the IRS over their tax returns and tax payments. This won't happen immediately but only when the IRS has made repeated attempts to contact the taxpayers without success.

In some cases, if a taxpayer is attempting to hide assets from the IRS, a case may rise to the level of tax evasion. A taxpayer may be charged with this crime when the IRS believes they are intentionally and knowingly failing to pay taxes.

Tax evasion is different than tax avoidance. The latter is a legal way of minimizing how much an individual or business pays in taxes.

When a taxpayer fails to file a tax return and pay taxes and doesn't respond to IRS communications, the IRS may view that noncompliance as rising to a level that warrants criminal charges. Such actions may be viewed as an attempt by a taxpayer to hide assets from the agency.

How to Avoid Criminal Charges

The easiest way to avoid criminal charges is to communicate with the IRS. Even if a taxpayer doesn't have the funds to pay, if they are communicating with the IRS, the IRS is unlikely to turn a civil case into a crime.

The IRS offers multiple options for repayment, including payment plans and offers in compromise (OICs). While a taxpayer may be required to pay interest, these resolution options will prevent, assuming a taxpayer is otherwise following the law, any criminal charges.

Failing to communicate with or ignoring the IRS, however, can limit a taxpayer's options in the future. Even if a case doesn't become criminal, a taxpayer may accrue penalties in addition to interest to satisfy their tax debt.

Get Help From a Seasoned, Experienced Tax Attorney

If you have questions about communicating with the IRS and avoiding criminal charges, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.