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What To Do If I Have Filed False Tax Returns?

innocent tax return mistakes

Filing a False Tax Return

Filing a tax return with deliberate falsification carries stiff IRS penalties. The tax agency does not take kindly or lightly to fraud; therefore, if you are accused of filing false tax returns, take your situation seriously. The long-term and short-term ramifications of falsifying income tax returns could be severe.

Innocent Mistakes

A tax return with errors or mistakes will get flagged and an IRS auditor would examine and evaluate it to determine if the issues are due to negligence or fraud. Keep in mind that auditors anticipate mistakes and usually give taxpayers some leeway or benefit of the doubt.

Also, auditors do not classify a return as fraudulent unless particular “badges of fraud” come to light and suggest wrongdoing. Some instances of badges of fraud are claiming false dependents or falsifying your Social Security number.

In case you merely made an honest mistake on the tax return, the IRS will send you a letter and with penalties and interest to resolve the matter.

Intentional Fraud

The agency lists several kinds of fraudulent acts that are in violation of taxation laws. Some examples of these fraudulent acts include intentionally underreporting or omitting income, maintaining two different sets of financial records, overstating deductions, claiming false deductions, and concealing income or assets.

Criminal Investigations

In case a criminal investigator contacts you, do not answer his questions. Instead, tell the investigator you have to consult with a tax attorney prior to making any statement. Also, keep in mind that the IRS investigators might also have a search warrant. In this case, cooperate fully with the search; however, do not speak with an investigator without a tax attorney present.

Possible Penalties

In case the IRS finds you guilty of misdemeanor tax fraud or intentional failure to file your tax return, pay your taxes or supply the relevant information. You may face as much as one year in jail or prison or be fined about $100,000.

On the other hand, if you are guilty of false statements or felony fraud, you can face a maximum of three years in prison with a fine of about $250,000.

When filing cases of false tax returns, the agency does not have to establish that it was deprived of taxes because of the filing of false tax returns. Even when it is proved that additional tax is due, the individual could still be held liable as they willfully or intentionally filed a false tax return.

Let A Tax Attorney Help You

If you are being accused of filing fraudulent tax returns, you should seek legal representation right away. A skilled and experienced tax attorney could proficiently assist, protect and represent you and your rights each step of the way. So act right now and contact Ayar Law and schedule your free consultation at (248) 262-3400.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.