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Understanding tax fraud versus negligence

As we approach the full sprint of tax season, many individuals may find themselves concerned with their upcoming tax returns, especially considering the sweeping changes to the tax code recently passed in congress.

No matter how complex or simple your finances, it is entirely possible to make a fairly serious error when preparing tax returns. Unfortunately, if you do submit your tax returns with errors, you may be in for an unpleasant surprise.

In some cases, faulty tax returns may trigger an investigation into your finances or even tax fraud charges. If you have any concerns about tax fraud, it is wise to consult with an experienced attorney. Professional legal counsel can help you understand the risks of your situation and build a strong legal defense to protect your rights and reputation.

What constitutes tax fraud?

When the IRS examines tax returns to catch fraud, they tend to look for certain patterns that align with methods of defrauding the government. If you act negligently while preparing your taxes, and that negligence aligns with one of these patterns, you may invite additional scrutiny into your finances. These patterns include

  • Inaccurately reporting income
  • Intentionally failing to pay due or overdue tax
  • Making false or incomplete claims
  • Claiming inappropriate benefits or credits
  • Failing to file a tax return altogether

When people commit one or more of these acts, they may commit tax fraud.

What if the violation was an accident?

By definition, accidents are not fraudulent. Even the IRS, an institution not known for its flexibility or compassion, understands that mistakes occur in many tax returns at many degrees of complexity. Due to the complexity of the tax code, it is fair to assume that many accuracies in a return are, in fact, accidental and not purposeful.

In these instances, the IRS may simply amend the return and alert the filer of the amendment. If the inaccuracy incurred some fine or altered the final bill or refund, the IRS may either add to the refund amount or require the person pay the difference, including a fine for the mistake.

Don't face fraud accusation alone

It is never wise to face any kind of fraud accusation on your own. Without legal representation from an experienced attorney, you may have no one you can confide in privately. An attorney can help you explore your options and build your defense in confidence, allowing you to keep your private affairs private while you work through this difficult season.

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