Tax Mistakes Are Sometimes Considered Tax Fraud

Illionois defense attorney,  Illinois criminal defense lawyerApproaching tax season, many taxpayers in Illinois and across the country are thinking about their tax return. It is a frustrating time, as some people may owe income taxes, but the Internal Revenue Code itself is extremely confusing. It is also changing all the time, making it even more difficult to keep up on all the different tax laws. Understanding these laws is crucial. The IRS may consider just one mistake on a tax return fraud, which could result in severe penalties for the taxpayer.

Below are some of the most common mistakes misinterpreted as tax fraud. These are sometimes referred to as “accidental fraud.”

Incorrect or Incomplete Information

 Before filing an income tax return, it needs to be double-checked and then checked again. Even a mistake in basic information such as a social security number or address can result in a charge of tax fraud.

Incomplete tax returns are easier to file than some may think. This is particularly true when someone is claiming a credit. Claiming credits often requires the taxpayer to fill out additional forms. When the credit is claimed but the respective form is not filled out, this makes the return incomplete.

Most of these mistakes will not lead to charges of tax fraud. However, if additional mistakes are made or there are extenuating circumstances around the return, even these simple errors could result in criminal charges.

Inaccurate Deductions

It is difficult for taxpayers to understand what counts as a valid deduction and what does not. When deductions for a business are involved, it is even more challenging. Any deductions claimed are subtracted from a person’s overall income. The more claimed, the less a person may owe in income taxes.

It is for this reason the IRS consider inaccurate deductions as tax fraud. They also understand it is difficult to know all possible deductions, which is why they have created a guideline of credits and deductions on their site.

Even the simple mistake of claiming a lunch as a business lunch when it was not can result in a charge of tax fraud. This is why it is so important to also double check any deductions, and ensure they are accurate.

Omitting Income

All Americans are required to fill out their income tax return completely and honestly. This includes detailing all income earned the previous year. When the IRS suspects a person of not claiming all of their income, that person is likely to get audited. If the IRS finds unclaimed income, they can then press charges for tax evasion. This mistake is also an easy one to make. Even a small oversight such as leaving tips unclaimed can result in a tax evasion charge.

Unlawful Tax Shelters

A tax shelter is a financial agreement a person makes in order to pay fewer taxes. They are legal, however, there are tax shelters that operate illegally. This is often difficult for the taxpayer, as they may not even know a tax shelter is illegal until it is too late. However, the IRS can still hold them responsible for creating or using the shelter.

Tax Return Preparer Fraud

The tax laws in the country are very confusing, which is why so many taxpayers hire a knowledgeable professional to complete their tax returns for them. In most cases, tax preparers are scrupulously honest and careful with these returns. Sometimes though, a tax preparer may inflate a person’s income so that they get paid more. Like unlawful tax shelters, a taxpayer that made the mistake of hiring the tax preparer may have no idea they are dishonest until it is too late.

Contact a Chicago Criminal Defense Attorney for Help Today

Facing tax fraud charges, like facing charges of any federal crime, is very scary. It is extremely challenging for those that thought they were simply following the law by filing their tax returns on time. However, charges do not have to lead to a conviction. A dedicated Chicago tax fraud lawyer can help. If you have been charged with tax fraud, contact the Law Offices of Hal M. Garfinkel at 312-270-0999 for a free consultation. We know the tax laws, and we know how easy it is to make a simple mistake. Do not go up against the IRS alone. Get the help you need by contacting us today.

Sources:

http://uscode.house.gov/browse/prelim@title26&edition=prelim

https://www.irs.gov/credits-deductions-for-individuals

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