It came as a shock when you learned police charged you with tax fraud. You file your taxes on time and do not lie on the forms. Where did you slip up?
Yahoo! Life explores ways taxpayers accidentally commit tax fraud. Learn where the charges stemmed from, so you can mount a defense.
Missing or inaccurate information
Double-check that you fill out tax forms completely and attach all necessary forms. For instance, if you qualify for a tax credit, find out whether you must submit an accompanying form. If you forget, you could give the IRS the wrong idea.
Misusing tax shelters
Rethink the tax shelters you use. The IRS could accuse you of abusing them if you are not careful. Consulting with a financial expert could help you determine if you use legitimate shelters for legitimate reasons.
Claiming earned income tax credits mistakenly
Consider speaking with a financial professional before claiming the earned income tax credit. You could think you qualify for it when you do not. Check that you meet the latest income limits and marital status and qualifying children requirements.
Claiming incorrect deductions
As a self-employed individual or small business owner, you could qualify for certain deductions. Before claiming them, ensure you meet the latest requirements. Only deduct necessary expenses, and use IRS resources to deduct business expenses properly.
Inflating deductions
You may think you stand a low chance of facing an IRS audit, but do not take the chance. Inflating your deductions to reduce your tax bill could backfire on you.
Accidental or not, tax fraud is still fraud. By learning what fraud looks like, you stay on the right side of the law.