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KN, p. 308 “Tax Fraud”

- Not filing taxes: 5% of the tax owed for each month the return is past due.
- More than 60 days late filing: A minimum fine of $435. Maximum fine is 25% of the total owed. (Plus the amount you owe)
- Not paying at all: 0.5% of the unpaid taxes for each month the outstanding taxes aren’t paid, plus interest. Ouch.
- Tax evasion is fraud and means that you have used illegal ways to conceal income, with fines, penalties, and possible jail time (maybe five years) if found guilty. You lied on the forms. They can even charge you for the cost of prosecution.
- Tax avoidance uses legal ways to reduce income with tax credits and allowable deductions.
