The word ‘fraud’ has an objectionable appeal to anybody who hears it. Put ‘tax’ in front of it, and it becomes especially bad. Tax fraud is a violation of one’s legal duty to voluntarily file income returns or pay the supposedly correct amount of income, employment, and other taxes one owes the state. The IRS alerts anyone who gets involved in any illegal strategies to avoid paying taxes as he may be obliged to pay fines with interests or be imprisoned for a period of time.
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Misrepresenting income or falsifying numbers are two of the most common methods of committing tax fraud. However, the government discusses other ways of breaking tax laws. Here are a couple of them:
• Unscrupulous tax return preparing. When a taxpayer needs the service of a tax preparer, the client has to make sure of the honesty and capacity of the preparer to do his job within the confines of the law and avoid fraudulent tax returns.
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• Non-filing of returns. Many citizens reason out that taxes are voluntary or illegal. Most of the time, the US courts see these arguments as frivolous, and they have imposed penalties to those who repeatedly believe these arguments as true.
To avoid tax frauds, financial penalties, or imprisonment, the government has routinely emphasized the power of education. The IRS, for one, has an abundant supply of resources to educate individuals and other entities about the adverse effects of tax scams and frauds.
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Isidor Hefter, CPA, specializes in tax planning for companies and high net worth individuals. This Facebook page contains more helpful tips on how to avoid tax payment pitfalls.
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