Penalties for lying on tax return?

What are the penalties? I know 2 people who lied on their tax returns.... One person owned a small cleaning business... I know they have to claim their employees, but they used their daughters ssn and she was only 13 at the time and they did it for 2 years... They were caught and did get fines and stuff but no jail time. Another person lied and when he was caught owed 50,000+, and they allowed him to pay in installments. I know that there is a chance of jail time, but it seems rare that people actually go to jail... Can someone clarify?