Can a Tax Mistake Lead to a White Collar Crime Charge?

woman reviewing tax forms and documents

With the April tax deadline rapidly approaching, many Pennsylvanians are hoping for a refund check after a year of chaos and uncertainty. But if you are facing financial burdens, tax season is dreaded and you may want to consider innovative approaches to shed some tax debt. However, no matter how desperate you may feel, tax evasion is not the answer.

What is tax evasion?

Tax evasion falls into two major categories:

  • Failure to pay taxes (state, federal, or local), whether intentionally or by accident, including estimated taxes, can enable you to commit tax evasion.
  • Tax fraud occurs when a person or entity submits tax forms with false information intended to deceive the government. This includes underreporting income, falsifying deductions, and concealment of assets.

Other forms of tax evasion include:

  • Underreporting income
  • Overestimating expenses/deductions
  • Failing to collect employment taxes
  • Making false statements to investigators
  • Violating employer withholding requirements
  • Not filing a yearly tax return

While these are the obvious forms of tax evasion, there are some common ways you may be committing tax fraud accidentally.

  • 1. Incorrectly claiming an earned income tax credit: If you try to claim an earned income tax credit without actually being eligible, you can trigger a fraud alert to the IRS. This includes claiming to be a low-wage earner or claiming children who are no longer dependants.
  • 2. Abusing tax shelters: If you utilize an accountant who seems too good to be true with the tax credits and shelters, they probably are. And if you fall for them, you can find yourself in large amounts of trouble with the law.
  • 3. Claiming the wrong deductions: If you are a small business owner and over-utilize tax deductions, you’ll quickly find that legal troubles will follow. Just because some ill-informed internet advice tells you that it’s okay–you should probably take some professional advice.
  • 4. Failing to report all income: Maybe you forgot to log one or two tips, but when you are a tipped employee and it’s a large portion of your income, you need to report it.

If you violated state or federal tax laws, you still have rights and protections that must be protected throughout any investigation into your tax returns.

Avoid Tax Fraud This Season: Call Mazzoni Valvano Szewczyk & Karam

Our Scranton tax evasion attorneys at Mazzoni Valvano Szewczyk & Karam have extensive experience handling complicated cases in Scranton and throughout Northeastern Pennsylvania. Along with tax law, our attorneys are well versed in real estate law and wills, trusts, and estates.

Put your trust in a law firm that puts your best interests first and contact us now. Call (570) 348-0776 and schedule an appointment at our conveniently located office in downtown Scranton.

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