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Can you accidentally commit tax fraud?

On Behalf of | Dec 15, 2020 | Criminal Defense, White Collar Crimes |

Most taxpayers in South Carolina understand that cheating on their taxes is a crime that can lead to serious consequences. These consequences can include as much as three years behind bars and a fine of up to $10,000. But many taxpayers may be surprised to learn that these penalties could apply to them even if they inadvertently misrepresent their tax responsibilities.

The IRS defines tax evaders as people who commit an unlawful act to avoid paying their fair share of taxes. It is possible for people with no intent to commit white-collar crimes to become guilty of tax evasion.

Filing an incorrect return

Individuals must file accurate and complete tax forms to eliminate the possibility of fraud allegations. When the IRS discovers missing or inaccurate information on a tax return, a complete audit of the taxpayer becomes possible. Professional software may help tax filers concerned with the accuracy of their filing.

Earned income credit

One of the most common triggers for IRS audits is claiming earned income credit when it does not apply. Taxpayers must understand all the requirements and regulations for EIC before claiming this credit on a tax filing.

Wrong deductions

Many taxpayers file for deductions that are not allowable on their taxes. The root cause of this problem is the fact many people are unclear about what constitutes an allowable deduction. There is less chance of making this mistake when taxpayers take advantage of the many software options available to them.

Not reporting income

A person can forget some of the income they made during the year when tax time arrives. This is especially true for people who receive tips or perform contract work. However, not reporting all the income made in a year constitutes tax fraud. It may help to record tips and other payments throughout the year and not wait until it is time for tax filings to account for all money earned.

Individuals accused of tax fraud face the threat of damage to both their personal and professional lives. A criminal attorney may represent a person who needs to defend themselves against fraud allegations.