I have had a Google AdSense account for a while. In 2013, Google started requiring to fill out tax information. I was an idiot and decided to claim that I lived in another country and that I had no activity in the U.S. to avoid having to pay taxes on that income. It was not much money so I assumed it wouldn't be a big deal.
Over the years that income started to become significant and I became concerned. Last week I decided to properly fill out my W-9 and to start reporting that income.
I did the math and I should have paid a total of $3,200 in taxes from this income between now and 2013 (25% tax bracket every year plus 15.3% self-employment tax).
Yes, I understand that I'm an idiot, that I did a horrible thing, and that I can get in a lot of trouble. I also understand that I should amend my taxes for those years, but let's assume I just let it go.
In how much trouble can I get exactly if the IRS finds out? I understand that there's a 6 year statute of limitations on criminal charges and no limitation at all on fraud. Is this considered fraud? I'm assuming not.
Practically speaking, would the IRS go all the way and file criminal charges considering the amount of money I owe? Assuming the statute of limitations clock started ticking last week, how much would I have to pay in penalties and interest if this gets brought up at the very last minute of the 6 year mark? Practically speaking, what's the worst case scenario?