Taxpayers have gone through their first year under the new Tax Cuts and Jobs Creation Act. In light of this, the IRS has eased its rules and penalties. These include no penalties if the taxpayer pays at least 80% of what the IRS determines to be their tax obligation on time.
What happens if I found an error in my numbers?
The IRS automatically fixes any mathematical errors on a return at no charge to the taxpayer (though it may mean additional money owed) and they will notify them by letter. Often these are issues created by accident through omission or error, perhaps when someone comes across a pay stub, or they forgot to include a form in their filing. These can be amended using a 1040X with the correct information. It is best to do this online.
Appealing the IRS’s audit
The IRS has shown itself to be particularly lenient for the first year under the new system. There may be opportunities to win an appeal of their findings with the help of a qualified attorney.
Tax fraud often starts as negligence
Sometimes a taxpayer misses a year. This was an innocent mistake perhaps caused by extenuating circumstances. Then it snowballs to several years because the taxpayer realizes that they do not have the money to pay the penalties involved. While taxpayers do not go to jail for not filing their taxes, not filing for several years or willfully filing a misleading return can mean criminal proceedings in a federal court.
Common examples of criminal or fraudulent behavior include:
- Willfully fails to pay taxes due
- Intentionally fails to report all income or any income
- Makes false or fraudulent claims such as claiming too many dependents
- Willfully prepares and files a false claim
Help to face serious changes
Those facing tax evasion charges will need guidance from an experienced criminal defense attorney who works in the federal courts. A strong advocate can help the government understand the defendant’s side of the story and perhaps find a solution that reduces or eliminates potential time in prison.