FAILURE TO KEEP RECORDS

Historically, prosecutions for the willful failure to keep records or supply information are very rare. Every person or entity liable for any tax is required by law to keep records, render statements, and comply with regulations that the IRS may from time to time prescribe. Additionally, persons or entities subject to income tax are required to keep permanent books of account or records, including inventory records, sufficient to establish the amount of gross income, deductions, credits, or other matters required to be shown in income tax returns of those persons or entities. Moreover, a person or entity that prematurely disposes of accounting records kept on magnetic media is subject to the criminal penalty for failure to keep records.

FAILURE TO SUPPLY INFORMATION

The crime of failure to supply information may apply when a taxpayer files a return that is complete enough to qualify as a return but however omits required information. For example, a failure to supply information criminal charge was brought against a partnership when it filed a return that was complete except for the required balance sheet information. This action could have also be prosecuted as a felony for the filing of a false return.

PUNISHMENT

This crime is a misdemeanor punishable by up to one year in prison and/or fine of up to $25,000 ($100,000 for corporations). The statute of limitations is three years.