Legal Question in Tax Law in California

What is the penalty for omitting income past 5 years?

Hello,

Someone tips off IRS that I did not report my tips at work and the rental income paid by my 3 housemates past 5 years.

I wonder what is the penalty for it? Would I have to do the jail time? Or I will just receive the penalized backed tax payment instead? What is the penalty for such intentional omitting income crime?

Help.

Thank you,

PYC


Asked on 9/09/04, 2:49 pm

1 Answer from Attorneys
Ken Koenen Koenen & Tokunaga, P.C.

Re: What is the penalty for omitting income past 5 years?

Tax fraud, such as intentionally failing to report income, could be penalized with jail, but rarely is for something like this.

Regarding the rent you charged your roomates, you would most likely be able to offset most of that by expenses, including what you paid in rent or depreciation.

The tips could result in a penalty of at least 25% of the tax plus .5% per month unpaid.

You may want to amend your tax returns for those years before they audit you.

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Answered on 9/09/04, 3:48 pm


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