The IRS defines tax fraud as "an intentional wrongdoing, on the part of a taxpayer, with the specific purpose of evading a tax known or believed to be owing."
Source: irs.gov
Costs:
> Paying auditors and attorney fees
> Possible jail sentence
> Paying back taxes
Benefits:
> The government eventually gets the money owed to them,
via wage garnishment, payback plan, etc.
> Punishment discourages future tax evasion
Sources:
irs.gov (Criminal Investigation)
irs.gov (Negligence vs Tax Fraud; Penalties)