NOTE: I normally put these kinds of posts under the category “Consequences,” but this case example addresses an important question I am often asked: When does a civil tax debt transform into a criminal case?
Owing money to the IRS—even large amounts—is not a crime. But falsifying returns, hiding income, concealing assets, or making false statements can trigger criminal prosecution and potential prison time. Read on!
CASE: A recent federal case out of Florida highlights how quickly IRS problems can spiral out of control when handled the wrong way. A Jacksonville minister pleaded guilty to obstructing the Internal Revenue Service after attempting to block the agency’s efforts to collect more than $600,000 in unpaid taxes.
According to court records, the taxpayer initially filed a return that accurately reported more than $1.4 million in income. The issue wasn’t the reporting—it was the failure to pay. When the IRS began collection actions, including filing liens and attempting bank levies, the situation escalated.
Instead of working toward a legitimate resolution, the taxpayer allegedly amended his return to remove most of the previously reported income, relied on fictitious backdated documents, underreported income for multiple years, and eventually stopped filing tax returns altogether while continuing to earn money. These actions transformed a civil tax debt into a criminal case.
This distinction is critical. Owing money to the IRS—even large amounts—is not a crime. But falsifying returns, hiding income, concealing assets, or making false statements can trigger criminal prosecution and potential prison time. What began as a collection issue ultimately exposed the taxpayer to severe legal consequences.
The IRS has far more visibility and patience than many people realize. Attempts to “fix” tax problems through deception often make matters worse, not better. Once criminal investigation becomes involved, options narrow quickly and the stakes rise dramatically.
The takeaway: IRS problems don’t disappear—they escalate. If you’re dealing with back taxes, liens, levies, or unfiled returns, addressing the issue early and honestly is essential. At Tax Resolution 360, we help taxpayers resolve IRS issues the right way—before they become far more serious. Contact Tax Resolution 360 today for a confidential consultation and protect yourself before the IRS takes the next step.