Tax Evasion

What is tax evasion?

Tax evasion is deliberately not paying the right amount of tax. You might do that by either understating the amount of earnings that you disclosed to the Tax Man, or simply not telling the Tax Man at all that you're earning. If you do that, and are found out, you will pay not only the tax but also interest on the unpaid tax, and penalties as well. In very severe cases of tax evasion, you may even go to prison.

What is the penalty for tax evasion?

The penalties for tax evasion are pretty severe. If you come clean and tell the tax man about deliberate tax understatements in the past, they will settle with you by collecting the extra tax, interest on the tax, and a penalty. At the other end of the spectrum, if your tax evasion is on a very big scale and is very serious, and amounts to a sort of conspiracy; you may even still end up in prison.