Doing your taxes can be complicated. Mistakes are fairly common. Most people who do their taxes spend a bit of time worrying and feeling stressed about making these errors. They’re worried about the potential ramifications, and they may even believe that making tax mistakes is illegal.
The reason for this belief is that tax fraud is an illegal process in which you intentionally pay too little in taxes. An example of this would be if someone reported that they only made $50,000 during the year when they actually made $100,000. By reporting their income at a far lower level than it was, they make it look like they’re not responsible for the taxes that they should pay. This defrauds the IRS and can lead to arrest.
It has to be willful
The thing to remember is that a tax mistake that you make accidentally, something that is an honest error, is not illegal. The paperwork can be complicated. If you simply filled something out incorrectly or forgot to list something that you were supposed to include, that’s not an example of fraud.
But if you did the exact same thing willfully, then it could be fraud. Forgetting income is one thing. Intentionally leaving a source of income off of your taxes, however, is something completely different. As such, if the government accuses you of tax fraud, they have to show that you did it willfully and that you intended to commit fraud.
When the lines get a bit gray and you have a lot on the line, be sure you know about all of your legal options.