Fraud and false returns It applies to people who commit fraud or make false returns on tax returns. An error on your tax return could result in a 20% penalty being imposed on your tax bill. While this is not good, there is no doubt that this exceeds the cost of tax fraud: a 75% civil penalty. However, the line between negligence and fraud isn't always clear, even to the IRS and the courts.
Instead, IRS investigations begin with a source, usually an auditor, collector, or IRS informant, reporting that you may have committed a tax crime. Alternatively, the IRS may never send you the requested return if you have a code blocking a criminal investigation on your computer.