Willful neglect refers to a taxpayer’s intentional failure to comply with tax laws, either by not filing a tax return, underreporting income, or failing to pay taxes owed. Unlike mistakes or oversights, willful neglect is a deliberate act of non-compliance and can result in severe consequences, including:
- Increased penalties.
- Criminal prosecution.
- Interest on unpaid taxes.
The IRS distinguishes willful neglect from innocent errors by examining the taxpayer’s actions and intent. Taxpayers who act in good faith and attempt to comply with tax laws may be able to reduce or avoid penalties. However, taxpayers who engage in willful neglect, such as deliberately hiding income or falsifying information, may face criminal charges and substantial fines.
To avoid the penalties associated with willful neglect, taxpayers should ensure they meet all filing and payment deadlines and seek professional advice if they are unsure about their tax obligations.