Nobody likes paying taxes; however, there are steep tax fraud penalties for those who miss payments or report inaccurate information. It is never a good idea to challenge the IRS (Internal Revenue Service) by maliciously withholding money or lying about your income. Audits are common and can expose even the smallest bit of erroneous information. The cons of tax fraud can affect your life for years and cost you a great deal of money. If you would like to challenge your taxes, join a local anti-tax political campaign.
- Tax fraud penalties punish the following actions: Attempting to evade taxes, failing to pay over tax, failing to file a return, failing to file necessary information, making false statements, attempting to interfere with the administration of IRS laws, conspiring to defraud the United States, or assisting someone in any of the above actions. Contact a legal professional if you have any questions about what is covered by tax fraud laws. Penalties are severe and increase depending on the amount of money involved.
- Most tax fraud penalties are felonies. Cons of a felony include one year or more in prison and extensive fines. Having a felony on your record will make it difficult to apply for a job, buy a home, or enroll in college.
- In order to be convicted, there must be willful malicious intent. Most tax fraud penalties require the perpetrator to be willfully and maliciously breaking a law. Proving this can be somewhat simple, since the person simply has to be aware of the law he is breaking. Forgetting a form or accidentally withholding information can sometimes be portrayed as willful negligence. Your best bet is to file your taxes completely and accurately the first time. Consult an accountant if you are uncertain of any rules or regulations.
- Tax fraud penalties punish those who aid or assist others in tax evasion. Depending on the situation, those who are aware of potential tax fraud but do not report it to the authorities may be guilty of a misdemeanor or felony. If you are aware of tax fraud taking place, it is your responsibility to report the perpetrator. You do not have to physically help the person to be considered an accomplice; simple awareness of the situation can sometimes warrant a tax fraud penalty.
Tax fraud is a serious crime in the eyes of the law and is penalized as such. To avoid extensive tax fraud penalties, be sure to file your taxes completely and accurately. The amount of money you could save by lying on your taxes is small compared to the many cons of tax fraud. To avoid these cons and save money, hire a good accountant or research applicable exemptions and refunds.