Kushner Law Group, PLLC
Kushner Law Group, PLLC
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Tax mistakes and tax evasion: what’s the difference?

On Behalf of | Sep 30, 2021 | White Collar Crimes |

Many people in New York and elsewhere think that an error in filing taxes could be treated as tax evasion by the IRS. Those people need to know that two are not the same. While one is a genuine mistake made while filing tax forms that can run into several pages, the other is a conscious effort to underreport income in order to reduce the tax liability.

Tax mistakes

As mentioned earlier, tax forms can often be several pages long and despite the various aids that are available both online and offline, their complicated nature often leads an ordinary tax filer to make an error. The IRS understands that there are possibilities of human error and therefore, it does not treat minor errors as signs of tax evasion.

Tax evasion

Tax evasion, on the other hand, is a different game altogether. Often individuals and businesses that operate mostly in cash underreport their income in order to reduce the tax liability. Some businesses try to achieve the same objective by inflating expenses, while many families overstate the size of their household in order to receive more deductions.

IRS investigations

That said, for the IRS to charge someone with tax evasion, it needs to prove that the person intentionally underreported his or her income, which resulted in less taxes being collected. The IRS will issue a notice to pay the remaining tax and may also impose a fine but there are rarely incidents of the matter being taken to a criminal trial.

Facing tax evasion charges

Despite all precautions, it may sometimes happen that the IRS charges someone with tax evasion. In such situations, it may be a wise decision to seek professional help at the earliest. After all, the consequences of a conviction for tax evasion are serious unless they are addressed at the right time and with the right knowledge.