No matter who you are or how diligent you are, there will be times when you make mistakes on your tax returns. For example, if you're adding or subtracting numbers, there's always a chance you could make a math error -- thus impacting how much money you pay.
While a mistake can result in having to pay penalties and interest, it's not a crime. The Internal Revenue Service (IRS) expects this, and it will simply ask that you fix the error and pay any additional money that you owe.
Income tax fraud, on the other hand, is much more serious. This is a willful attempt to evade tax law, typically with the idea of paying less in taxes than you owe.
Some of the many forms of income tax fraud include:
- Preparing and filing a false return
- Willful disregard for paying taxes that are due
- Fraudulent or false claims
- Intentionally failing to report all income, such as cash earnings
Think about it this way: If you're looking for a reason not to pay the taxes you owe, it could be considered tax fraud. While many people get away with this, among other forms of fraud, it's not a risk you want to take.
If you're charged with income tax fraud, don't assume the IRS will let you off easy. Depending on the circumstances, a conviction could result in a hefty fine and even prison time.
Since there is gray area associated with the tax law, it's possible you could make a mistake when you didn't really know what you were doing. This is why it's so important to understand your legal rights and seek the guidance of a criminal defense attorney experienced in dealing with fraud crimes.