Sloan P. Ellis Law Firm, LLC

Don’t confuse an honest mistake with tax fraud

No matter who you are, there may come a time when you make a mistake with regard to your taxes. For example, a simple math error could lead to a refund as opposed to owing the IRS additional money.

Here's what you need to know: There is a big difference between an honest mistake and tax fraud.

Many people believe they will be charged with a crime if they make a mistake on their tax return. This is not true. In fact, the IRS expects this to happen from time to time. The agency is well aware that the tax code is complex, which often leads to errors.

However, there are times when tax fraud comes into play. This is when an individual or company purposefully takes steps to underpay its taxes. As a result, the person or company can end up in a lot of trouble with the law.

Tax evasion, for example, remains a major problem in today's world. Although people know that this is against the law, they continue to go down this path in an attempt to keep more money in their pocket.

There are many forms of tax evasion, such as an individual who does not report all of his or her cash earnings. This is most common among people who receive cash payments, such as waiters and hair stylists.

Another common form of tax evasion is when a company inflates its expenses with the idea of taking a larger deduction. In the end, this allows them to owe less money in taxes.

Many people believe they can get away with tax fraud, especially on a small scale, since the IRS has so much on its plate. However, this is not typically the case.

Unfortunately, there are times when people are charged with tax fraud when all they really did was make an honest mistake.

If you find yourself in this position, you should take the time to fully understand your charges and what this means. From there, don't wait another day to consult with a tax attorney. You need somebody on your side who can explain your situation and take steps to help you avoid trouble. In other words, you want to put this behind you as soon as possible.

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