What is the difference between criminal tax penalties and civil tax penalties?
Just like it sounds. If you commit tax evasion or tax fraud the IRS can prosecute you and send you to jail. Generally most tax crimes carry a maximum five year prison term and a fine of $100,000. The same conduct which constitutes criminal tax fraud may also be considered civil tax fraud. It’s up to the IRS whether it wants to impose criminal tax penalties, civil tax penalties or both; Civil tax fraud can’t send you to jail. However, it can result in a penalty of 75% of the tax due, plus interest.