Unreported Income Penalties (IRS Penalties for Not Reporting Income)
The IRS devotes a large part of their time and resources to trying to uncover sources of significant unreported income, so that it can reserve the right to issue severe unreported income penalties. There are various penalties a person can be found liable for such as:
- Failure-to-File Penalty
- Failure-to-Pay Penalty
- Underreporting Penalty
- IRS Foreign Reporting Penalty
- Fraud Penalty
Common questions we receive include:
- What if I did not report income?
- What if the income is from overseas?
- What if I already paid foreign taxes?
- Am I guilty of tax fraud or evasion?
- Will I go to jail?
- Can I reduce or avoid penalties?
Unreported Income Penalties
Since the IRS is understaffed, it has to direct its resources to situations which are most likely to yield the highest dollar return. And, typically that involves unreported income penalties.
It should be noted that the IRS does not just focus on “whales,” as people would like to believe. Rather, the IRS focuses essentially anywhere it thinks it can recover significant tax, penalties and interest.
In recent years, the IRS has focused on high-dollar issues involving:
- Foreign Passive Income
- Foreign Business Earnings
Unreported Income may lead to an IRS Criminal Investigation
It is important to note that not everyone who has unreported income may get hit with unreported income penalties, such as monetary fines or worse, but some do — and the penalties can be intense.
With that said, there are IRS Tax Amnesty programs available to assist you with safely getting into compliance.
Common crimes a person may commit involving unreported income include:
- Tax Fraud
- Tax Evasion
- Money Laundering
- White Collar Crime
Golding & Golding, A PLC
We have successfully represented clients in more than 1000 streamlined and voluntary disclosure submissions nationwide, and in over 70-different countries.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.
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Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.
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