Question

Under the tax law, taxpayers may be subject to both civil and criminal penalties for underpaying their tax liability (e.g., due to fraud). True or False?

Answer 1

Under the tax law, taxpayers may be subject to civil and criminal penalties for underpaying their tax liability, including fines and imprisonment for criminal charges.

Step-by-step explanation:

Under the tax law, taxpayers may be subject to both civil and criminal penalties for underpaying their tax liability.

Civil penalties are imposed by the government to collect additional taxes that were not paid. These penalties usually include fines and interest on the unpaid amount.

Criminal penalties, on the other hand, occur when taxpayers intentionally commit fraud or tax evasion. This can result in criminal charges, including fines and imprisonment.