What Are the Consequences of Tax Evasion?

While it may be tempting not to claim or report your income, especially if you are just renting out one or two rental apartments, this is a terrible idea and a risky approach. Tax evasion is investigated by the Internal Revenue Service Criminal Investigation unit. If the IRS finds out about extra income you failed to report, the agency will force you to pay penalties and back taxes. Reporting your income honestly and paying taxes is your biggest responsibility.