Remember that tax mistakes are generally not illegal

On Behalf of | Jan 5, 2022 | Tax Law |

As we start the new year, a lot of individuals and business owners are thinking about their taxes. It’s time to get all the paperwork together and figure out exactly how much money the government is owed.

The United States uses an interesting system to do this, whereby individuals are asked to do their own taxes, despite their lack of training or expertise in this area. The government then examines these taxes and sometimes performs audits to find the mistakes, rather than simply doing this work in advance and telling people how much they needed to pay.

This does concern many individuals, as they worry that making an honest mistake is going to lead to serious legal charges. And it can. But you do need to remember that these mistakes may not actually be illegal.

Did you intend to commit tax fraud?

The biggest question the government has to ask is not whether or not you made the error, but whether or not you intended to do so. If you did intend to do so, then it may be fraud. It’s not an honest mistake if you did it on purpose in order to save money or get a bigger return. 

If you didn’t intend to do so, then it may simply be an error. While some fines and other ramifications are still applicable to errors, you have not committed the crime of intentional fraud.

Needless to say, being accused of tax fraud can be very concerning, even when you know you only made a mistake. Make sure you know what legal steps you can take at this time.