Such a juicy topic to cover today. Let’s cover the important matter related to tax compliance that has been making headlines recently, involving Hunter Biden, the son of President Joe Biden, who recently pled guilty to tax crimes as part of a plea agreement with federal prosecutors.
What exactly happened? Hunter Biden admitted to not paying his taxes on time for the years 2017 and 2018, despite earning substantial income during those years. The charges against him were based on Section 7203 of the Internal Revenue Code, which states that:
“Any person required to pay taxes or make a tax return, keep records, or provide information under the law, who willfully fails to do so at the required time, may be guilty of a misdemeanor. Upon conviction, the individual may face a fine of up to $25,000 ($100,000 for corporations), imprisonment for up to one year, or both, in addition to the costs of prosecution.”
Wait. So he filed his tax return. He paid his taxed by April 15. And that’s a crime?
Yup. If done willfully. It’s a crime. Gotta pay those estimated quarterly taxes throughout the year. Can’t just wait and pay it all the following April.
But a lot of people reading this blog post have done the same for years, and they haven’t been charged with a crime, so what’s up with that?
Well, it’s important to note that not everyone who fails to pay taxes on time is charged with a crime. The decision to pursue criminal charges depends on various factors, including the taxpayer’s compliance history, the amount of tax owed, and whether there are other potential crimes involved.
As your trusted tax advisor, my job is to tell you that maintaining tax compliance is crucial. While most taxpayers only face penalties and interest for late filing or late payment, criminal charges, while extremely rare, can come into play for cases involving willful and intentional violations of the tax laws.
The takeaway? It’s always best to meet your tax obligations promptly and accurately, but maybe especially if your dad might become president someday. Make sure to file your tax returns by the due date and pay any taxes owed on time. If you are unable to pay the full amount, it’s essential to communicate with the tax authorities and explore payment options or installment agreements.
Remember, the IRS and other tax authorities allocate limited resources to investigate and prosecute tax crimes. Their primary focus is to encourage voluntary compliance and address cases that involve significant noncompliance or willful actions.
If you have any concerns about your tax compliance or need assistance with your tax obligations, please don’t hesitate to reach out to me. I am here to help you navigate the complexities of the tax system and ensure your compliance.
