Tax Day is almost here, and individuals are scrambling to get their taxes done before the cut-off date. Some procrastinators may be wondering what can happen if you fail to file your taxes on time. Most of the time, failure to file and failure to pay tax penalties are issued by the IRS, and most penalties are monetary. Instead of getting the large tax return you hoped for, you may be forced to pay substantial amounts to the IRS as punishment.

Failure to File penalties are normally a fee that amounts to five percent of the tax owed for each month or part of the month that your return is late. The IRS has the right to charge you with this penalty for up to five months. If you are late to file by more than 60 days, then you may be fined either $135 of 100% of the unpaid tax.

The IRS can also issue Failure to Pay penalties to individuals who don't pay the full amount that they owe by the due date. Individuals who don't pay typically have to pay 0.5% of the tax owed each month that the tax remains unpaid. Sometimes individuals can avoid having to pay these fines if they request an extension before the filing deadline and have paid at least 90% of their tax liability before April 15.

Beyond late fees and failure to file penalties, tax fraud is considered a criminal offense. If you lie on your tax return and you are audited, then you may find yourself facing jail time and high fines and fees. Tax evasion is the crime of purposefully underpaying taxes. Mistakes on a tax return are not considered tax fraud. If you accidentally put the wrong numbers in the wrong places, or make mistakes when answering certain questions, the IRS will most likely pass over your return. Unless you are an accountant or tax professional, there is chance that you will make some mistakes on your return. You may still be fined for the error, but you will avoid a criminal trial.

Individuals who purposefully attempt tax evasion can be severely penalized as a result. This is a federal offense, because it affects a federal government agency.

Some examples of tax fraud include:

• Failing to file a tax return
• Destroying books to conceal tax evasion
• Creating false business expenses
• Transferring assets to conceal them from the IRS
• Failing to file returns
• Making false statements to the IRS under oath
• Denying deposits in your account are income
• Underreporting income
• Using a false Social Security number
• Claiming exemption for a spouse when you are single
• Inflating expenses
• Overstating the size of a household for larger deductions
• Misrepresenting circumstances

Oftentimes, companies that deal largely with cash are tempted to underreport income because they don't leave a lengthy paper trail in their midst. The first step in the tax fraud process is that of an audit. If you lied on your tax return and you are being audited, you will want to secure the help of an accomplished criminal defense attorney right away.

Tax evasion can lead to felony charges and up to five years in prison as well as a fine up to $250,000. Also, filing a false return is a felony that can carry up to three years in prison and a hefty fine. Not filing a return is a less serious offense, but can still lead to maximum of one year in prison and a fine up to $100,000. Don't hesitate to contact an aggressive criminal defense attorney if you are being audited and accused of tax evasion or fraud.