What is the difference between tax evasion, late tax filing, unfiled tax returns and unpaid taxes?
Tax evasion is the deliberate falsification of your tax return, either by not reporting income or falsely claiming expenses. It can lead to prosecution resulting in penalties of between 50% and 200% of the taxes evaded and in a prison sentence. Late tax filing incurs a late filing penalty of 10% of taxes owing. For repeat late filers the penalty is increased. Unfiled tax returns will normally lead to late tax filing and therefore penalties, but can also result in prosecution. Unpaid taxes result in interest charges on the balance owing. There are no further penalties or prosecution.
