While there’s a difference between negligence and intentional tax fraud, the IRS has serious consequences for anything they deem to be tax evasion. Taxpayers that make the conscious decision to lie when filing their taxes are playing a risky game with dangerous consequences. Though statistics show that the average tax refund is $3,000, some taxpayers try their best to increase their refund by adjusting the numbers in their paperwork. Rex Burgdorfer Apple Podcast shares that this type of misrepresentation is considered tax fraud and can result in the following situations:

1. The IRS Will Audit You

The first thing to consider when deciding what amount to file on your taxes is that the IRS already knows how much you’ve received in the past year. The IRS receives W-2s and 1099s from all your employers, so they already have the documentation reporting all your income. If you’ve accepted unreported payments by check or cash, the IRS will track your financial activity and monitor the income that hasn’t been reported.

If the IRS identifies this type of activity, they may decide to audit you. In an audit, the IRS extensively reviews your financial records and taxes to determine whether you’ve reported everything accurately. While less than 1% of taxpayers will be audited, failing to properly report your earnings will put you at risk for such situations.

Should you ever be audited, you’ll find that this costly and time-intensive process will require you to provide years-worth of documentation as well as in-person interviews. In the event of an audit, experts like Rex Burgdorfer Medium recommend hiring a professional to act as your legal representation.

2. You’ll Face Heavy Fees and Penalties

Taxpayers that decide to write inaccurate information on the taxes in order to increase their refund or lower their tax bill may ironically cost themselves more in penalties and fees in the future. If the IRS does perform an audit and find errors, they will charge you with steep penalties. Rex Burgdorfer Apple Podcast warns that taxpayers that don’t make their payment by the tax liability due date will face late payment penalties. Moreover, if they under-report their income, they may still be charged this late payment.

This late penalty is just the beginning of the added fees in this type of situation. The IRS may also charge interest on this underpayment. Individuals that are charged with tax fraud or tax evasion likely have to pay hefty fines worth several thousand dollars.

3. You May Experience Criminal Charges

Criminal charges often accompany the penalties and fees that are a result of tax fraud. Rex Burgdorfer Medium warns that tax fraud is considered a felony and is punishable with up to five years in jail. Likewise, failing to properly report financial accounts or foreign bank accounts can result in an even longer prison sentence.

A criminal investigation into tax fraud may start with an IRS auditor detecting fraud during their audit. While most people aren’t likely to face audits, the courts convict $3,000 people a year for tax fraud. Though the chances are low that you’ll face criminal charges for lying on your taxes, the consequences aren’t worth the risk of spending several years behind bars.

It can be gut-wrenching to discover your tax refund is significantly lower than you thought it would be. Similarly, it can be even more disappointing to discover that you owe the IRS money. Regardless of how tedious filing your taxes can be, it’s essential to input your information as accurately as possible. Let this information inspire to file your taxes properly and on time to avoid the potential consequences of tax fraud