Kansas City Criminal Defense Lawyers
6 Ways You May Be Accidentally Committing Fraud

6 Ways You May Be Accidentally Committing Fraud

When tax season comes around, many people joke that they may be accidentally committing fraud simply because they aren’t sure what they are doing to file their taxes is correct. Online tax assistance programs seek to make it easier for taxpayers, but mistakes still happen relatively frequently. You may be wondering, if you make a mistake on your official tax return or other forms, could you potentially be charged with fraud?

Ways of Committing Fraud

Underreporting Income

This is one of the most common tax violations. When people intentionally commit fraud by underreporting income, it is so that they will have to pay less back in taxes. However, some people may also do this accidentally. For example, forgetting to report earnings from any side gigs like driving Uber after work.

Some people may also deliberately choose to underreport income but are unaware that what they did is substantial enough to warrant a federal tax fraud charge.

Inaccurately Claiming Dependents

A dependent is a child or relative of the taxpayer. When the taxpayer claims one or multiple dependents, they receive financial benefits.

Valid dependents are:

  • Children under 19 years old or younger
  • Children 24 years or younger if they are a full-time student, have been a full-time student for five months of the tax year, or are permanently disabled.

If an individual believes that their children of any age can be claimed as dependents, they could be found guilty of inaccurately claiming dependents. Make sure you know who qualifies as a dependent before filling out your forms.

Missing Information

It’s clear to see how this error can happen by mistake. If the individual leaves information blank on their tax forms, they could receive a penalty.

Inaccurately Representing Donations

Making charitable donations can help lower your taxable income. However, some people are so eager to get this benefit that they report donations that do not apply. For example, if you received anything in exchange for your donation, you cannot report that contribution in your taxes.

Additionally, always be cautious about which organizations you donate to. If you donate to an illegitimate charity and report it on your taxes, this could also lead to unexpected trouble.

Deduction Errors

A tax deduction is a deduction that limits an individual’s taxable income.

Some common deductions include:

  • Property taxes
  • Medical expenses
  • Education credits
  • Student loan interest
  • IRA contributions
  • 401k contributions

However, overstating or exaggerating your deductions is considered fraud. If you thought it was okay to bend the truth a little to save some extra money, or if you believe you’ve accidentally included expenses that do not qualify as deductions, you’re not alone. It is estimated that nearly 75% of Americans make deduction errors.

Non-Filing

Filing taxes can take a lot of time and energy, which are things that some people lack. Some may choose to put off their taxes and miss the filing deadline. However, Americans have the duty to file taxes. If you do not, you can be charged with fraud for withholding your information.

Whether you intentionally or accidentally failed to file your taxes is a critical factor for what your potential penalty could be.

Penalties for Accidental Tax Fraud

If you made negligent mistakes on your taxes, you could face financial penalties.

The most common penalty payment for accidental tax errors are “substantial underpayment penalty” and “negligence or disregard of rules and regulations.” If you are found guilty of one of these errors, you could be required to pay an additional 20% of what you underpaid.

If the IRS finds that you intentionally made errors or lied on your tax documents, you can face criminal fraud charges.
If convicted, penalties include:

  • Up to five years of prison time
  • Hefty fines of up to $100,000

The good news is that simple oversights will not result in criminal fraud charges. If you made an innocent mistake on your taxes, you cannot be convicted of fraud, because you had no intent to commit a crime.

Fraud Charges Defense Attorneys

If you are being charged with a white-collar crime like tax fraud, our team at SRC Law Group is here to help you. Call us at (913) 583-0465 to begin your defense with our aggressive attorneys today.
 

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