Financial Planner

Answer: C - Criminal fraud or tax evasion is a felony offense. It is punishable by severe monetary fines up to $100,000 for an individual and $500,000 for a corporation and imprisonment in a federal jail. However, there must be guilt beyond a reasonable doubt for a person to be convicted. A “lesser” offense is civil frauds. The penalty is 15 percent for each month a return is late, up to a maximum of 75 percent. Fraud is defined as an intentional act of trying to cheat the government. The burden of proof for establishing fraud falls on the IRS. The IRS must show clear and convincing evidence that fraud actually occurred.