The Effects of Filing a False Tax Return

by Kathryn Hatter
If the IRS investigates and suspects fraud, IRS criminal investigators will contact you.

Filing an income tax return with intentional falsification can carry stiff penalties. The Internal Revenue Service doesn’t take kindly to fraud, so if you’re accused of it, take the situation seriously. The short- and long-term ramifications of filing a false income tax return can be severe.

Innocent Mistakes

A computer scans every income tax return the IRS receives. This computer assigns a score to every return and either flags it as a potential audit candidate or releases it for general processing. A return with mistakes likely will receive a flag and an auditor will examine it to determine whether the issues are a result of negligence or fraud. Auditors expect mistakes and typically give taxpayers the benefit of the doubt. Auditors won’t classify a tax return as fraud unless specific “badges of fraud” are present that suggest wrongdoing. Examples of badges of fraud include falsifying a Social Security number or claiming false dependents. If you simply made a mistake on your income tax return, expect the IRS to send you a letter and tack on penalties and interest to your tax bill to resolve the error.

Intentional Fraud

The IRS lists various types of fraudulent activities that would be in violation of tax laws. Examples of fraudulent activities include omitting or intentionally underreporting income, overstating deductions, maintaining two sets of financial records, entering false information in records, claiming false deductions, claiming business exemptions that are personal expenses and hiding income or assets.

Criminal Investigation

If criminal investigators contact you, don’t answer any questions. Tell the investigators that you need to speak with an attorney before you communicate anything. The IRS investigators may also have a search warrant. If this is the case, cooperate with the search, but do not speak with the investigators without an attorney present.

Possible Penalties

If you are found guilty of misdemeanor tax fraud for willful failure to file a tax return, supply information or pay taxes due, you might face up to one year in prison and/or be fined up to $100,000. If you are found guilty of felony fraud and/or false statements, you might face up to three years in prison and a fine of up to $250,000.

Tax Preparer Fraud

If a hired tax preparer commits fraud with your tax return, the IRS holds you responsible for additional taxes, interest and penalties -- even if you did not know the tax preparer committed fraud. Choose a tax preparer carefully, so you know the professional you use is honest and reputable. Review your return carefully before you sign it. A criminal tax preparer may face felony charges with penalties of incarceration and fines.

References

About the Author

Kathryn Hatter is a veteran home-school educator, as well as an accomplished gardener, quilter, crocheter, cook, decorator and digital graphics creator. As a regular contributor to Natural News, many of Hatter's Internet publications focus on natural health and parenting. Hatter has also had publication on home improvement websites such as Redbeacon.

Photo Credits

  • Creatas/Creatas/Getty Images
bibliography-icon | raiffeisen-cards.ru icon for annotation tool Cite this Article

Related pages


benchmark prime lending rate definitioncompanies that will cosign for youfirst time home buyers government grantsescalating rentderogatory accounts on credit reportemployee mileage reimbursementcopy of recorded deedwhat does institutional ownership meantexas statute of limitations debtirs efile vs turbotaxhow to calculate treasury bill ratefica hi taxaaa stolen cardhow to calculate insurance loss ratiodividends in roth iracredit score 601do federal tax liens expirerenttoownhousesveracity in nursing ethicslost usps tracking receiptwhat is the difference between qualified and ordinary dividendsflorida notary lawshomeowners insurance deductible on taxeshow to pay verizon bill by phonecan you buy whey protein with ebtallstate auto glass claimsrestricted stock lapsemedical bic cardhow to write a letter of reprimandcatholic charities rental assistanceverizon small business discountaarp medicare advantage hmotubal reversal grantsdonate ovenwhat is a price weighted indexcapital loss carryover how many yearssoft money definecitibank credit card cancellationscholarships for polish descenthsbc mortgage underwriterscan you send money western union with paypalstale dated check definitionowner financing terms and conditionsirs tuitionnotice of assessment ato lostpros and cons of the canadian healthcare systemcredit card magnetic strip protectorcan you do your taxes with your last pay stubis 688 credit score goodlongest credit card expiration datehow to apply for food stamps in nevadawashington landlord tenant lawsending money to cubacraigslist free stuff louisvillenso grantcosigning on a mortgagemyflorida access fax numbercan you get car finance without a driving licencefidelity 401k loans rulesearly withdrawal from roth ira penalty calculator658 credit score car loanmassage envy membership cancellation formexamples of personal budgetshow to calculate apy on savings accountquick claim deed new mexicohow bad does foreclosure hurt your creditarmy slrp websiteoriginal issue discount definitiongeorgia cdl trainingsubordinated convertible debtcash accounting and accrual accounting differenceoppd bill payvanilla card visa balanceare funeral expenses deductibledo you need probate if your husband dies

Related pages


benchmark prime lending rate definitioncompanies that will cosign for youfirst time home buyers government grantsescalating rentderogatory accounts on credit reportemployee mileage reimbursementcopy of recorded deedwhat does institutional ownership meantexas statute of limitations debtirs efile vs turbotaxhow to calculate treasury bill ratefica hi taxaaa stolen cardhow to calculate insurance loss ratiodividends in roth iracredit score 601do federal tax liens expirerenttoownhousesveracity in nursing ethicslost usps tracking receiptwhat is the difference between qualified and ordinary dividendsflorida notary lawshomeowners insurance deductible on taxeshow to pay verizon bill by phonecan you buy whey protein with ebtallstate auto glass claimsrestricted stock lapsemedical bic cardhow to write a letter of reprimandcatholic charities rental assistanceverizon small business discountaarp medicare advantage hmotubal reversal grantsdonate ovenwhat is a price weighted indexcapital loss carryover how many yearssoft money definecitibank credit card cancellationscholarships for polish descenthsbc mortgage underwriterscan you send money western union with paypalstale dated check definitionowner financing terms and conditionsirs tuitionnotice of assessment ato lostpros and cons of the canadian healthcare systemcredit card magnetic strip protectorcan you do your taxes with your last pay stubis 688 credit score goodlongest credit card expiration datehow to apply for food stamps in nevadawashington landlord tenant lawsending money to cubacraigslist free stuff louisvillenso grantcosigning on a mortgagemyflorida access fax numbercan you get car finance without a driving licencefidelity 401k loans rulesearly withdrawal from roth ira penalty calculator658 credit score car loanmassage envy membership cancellation formexamples of personal budgetshow to calculate apy on savings accountquick claim deed new mexicohow bad does foreclosure hurt your creditarmy slrp websiteoriginal issue discount definitiongeorgia cdl trainingsubordinated convertible debtcash accounting and accrual accounting differenceoppd bill payvanilla card visa balanceare funeral expenses deductibledo you need probate if your husband dies
"].join(""));l.close()}catch(m){b.src=a+'d.write("'+loaderHtml().replace(/"/g,String.fromCharCode(92)+'"')+'");d.close();'}b.contentWindow.config=k;b.contentWindow.SCRIPT_ID=g},0)}}}(); window.usabilla.load("w.usabilla.com", "4a73c8c43a12"); /*]]>{/literal}*/