Key Takeaway
Tax crimes of omission involve four primary offenses: (1) willful failure to file under IRC §7203 (misdemeanor); (2) willful failure to pay under §7203; (3) willful failure to collect or pay over under §7202 (felony); and (4) failure to file FBAR under 31 USC §5322 (criminal FBAR). The short version is that failures to act can still be crimes when willful. In our experience, failure-to-file charges are common, especially when combined with a pattern of non-filing across multiple years.1
Failure-to-file concern? A 15-minute consultation is free.
Four tax crimes of omission.
The Four Omission Crimes
File7203Pay7203Collect7202 FelonyFBAR31 USC 5322
| Offense | Penalty2 |
|---|---|
| Failure to File (§7203) | Misdemeanor, up to 1 year |
| Failure to Pay (§7203) | Misdemeanor, up to 1 year |
| Failure to Collect (§7202) | Felony, up to 5 years |
| FBAR (31 USC §5322) | Felony, up to 10 years |
Quick Reference
Jump to: file, pay, collect, or FBAR.
1. Failure to File
§7203 misdemeanor for willful failure to file.
If this is you: Multi-year non-filer. Willfulness element. Per-year misdemeanor charge. Stacked counts for multiple years.
Failure-to-File Strategy
- Challenge willfulness.
- Establish good-faith defense.
- Consider voluntary filing.
- Negotiate with prosecution.
- Engage counsel.
2. Failure to Pay
§7203 misdemeanor for willful failure to pay.
If this is you: Filed but didn’t pay, willfully. Less common than failure-to-file charges. Requires willfulness.
3. Failure to Collect or Pay Over
§7202 felony for trust fund tax violations.
If this is you: Employer / responsible person failing to collect or remit payroll taxes. Trust fund tax. 5-year felony. Often combined with civil trust fund recovery penalty.
4. Criminal FBAR
31 USC §5322 — up to 10 years for willful FBAR non-filing.
If this is you: Willful FBAR non-filing. Up to 10 years prison + $500K fine. Criminal statute separate from civil. Pattern + willfulness drives prosecution.
Failure-to-file charge? Book consultation immediately.
Omission Crime Lookup
| Authority | Offense |
|---|---|
| IRC §7203 | Failure to file / pay (misdemeanor) |
| IRC §7202 | Failure to collect / pay over (felony) |
| 31 USC §5322 | Criminal FBAR |
| IRC §7215 | Trust fund violations |
| Form 941 (payroll) | Trust fund obligation |
Omission Statute
- 6-year criminal statute.
- Runs from due date of return.
- Continuing-offense theory in some cases.
Omission Patterns
| Situation | Outcome |
|---|---|
| Multi-year non-filer + willful | §7203 charges |
| Payroll trust fund | §7202 felony |
| Willful FBAR | 31 USC §5322 |
| Good-faith defense | Possible acquittal |
Omission Escalation
Investigation
CI examines pattern.
Indictment
Per-year counts.
Trial
Willfulness element.
First 48 Hours
- Do not make statements.
- Engage counsel.
- Preserve records.
- Evaluate voluntary disclosure.
- Document good-faith defenses.
★Brotman Law defends omission tax crimes. Based in San Diego.
The ROI Question
§7203 / §7202 carry prison exposure. Professional defense essential.
Under Criminal Tax Investigation?
If you know or suspect the IRS Criminal Investigation division is looking at you, the time for routine tax advice is over. What you say and do in the early stages matters significantly — and the window for voluntary disclosure closes the moment CI makes contact. If you’re in this situation, get counsel before you respond to anything.
Get Criminal Tax Counsel → Or call: (619) 378-3138
When to Engage
- Multi-year non-filer.
- Payroll trust fund issue.
- FBAR willfulness concern.
- CI contact.
Failure-to-file charge?
15-min consultation free.
Guide Chapters
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Frequently Asked Questions
What is the tax crime of omission?
Four — willful failure to file (§7203), willful failure to pay (§7203), willful failure to collect / pay over (§7202), willful FBAR non-filing (31 USC §5322).
Is failure to file a crime?
Willful failure to file: misdemeanor under §7203. Up to 1 year per year. Multi-year pattern supports willfulness.
What's willful?
Voluntary intentional violation of known legal duty. Not careless or inadvertent. Must prove willfulness beyond reasonable doubt.
How many years to be criminal?
No fixed number. Pattern supports willfulness. Multi-year non-filing common prosecution fact pattern.
Is §7202 trust fund only?
Yes primarily. Payroll tax collection / remittance. Employer / responsible person.
What's the §7203 sentence?
Up to 1 year per count. Multiple counts can stack. Guidelines typically lower actual sentence.
What's the §7202 sentence?
Up to 5 years per count. Trust fund cases more serious.
What's criminal FBAR?
31 USC §5322 felony. Up to 10 years + $500K fine. Willful non-filing pattern typical prosecution.
Can I avoid prosecution?
Voluntary disclosure pre-CI can often avoid criminal. Timing critical. Attorney evaluation.
Is it stacked with civil?
Yes. Civil penalties separate from criminal. Both can apply. Tax + penalty + interest in civil; prison in criminal.
What's good-faith defense?
Genuine belief filing / payment not required. Cheek v. U.S. protects subjective belief. High bar for defendant.
Can I raise Cheek?
Cheek v. U.S. established good-faith belief defense. Not perfect defense. Must be genuine belief.
Are small-business owners targeted?
Payroll trust fund §7202 often. Small business cases common. Responsible person doctrine.
Next Steps
Omission crime question? 15-min consultation free.
- Omission offenses: IRC §§7203, 7202; 31 USC §5322.
- Willfulness standard: Cheek v. United States, 498 U.S. 192 (1991).
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