Tax evasion may seem harmless but has steep consequences

On Behalf of | Apr 6, 2017 | Firm News, White Collar Crimes

Doing taxes is not fun for most New Yorkers and it’s even less so when money is due to the government. As tempting as it may be to lie or omit certain information in order to pay less in taxes, getting caught doing so can result in severe penalties.

It is important to note that there is a big difference between making a mistake on a personal or business tax return and trying to willfully deceive the government. As the Motley Fool points out, if the Internal Revenue Service catches something that is clearly an accident, the problem will likely go away once it is rectified. However, if a tax return contains false information or intentionally omits information, the outcome may be much more serious.

Even misreporting income by a small amount can result in huge penalties and because tax evasion can be both a civil and criminal matter, the financial stakes are even higher. If convicted at the criminal level, prison time may also be on the table, in addition to any fines or penalties that are assessed. All that, of course, is on top of paying any actual amounts that were due.

There may also be hidden consequences to tax evasion. Even if someone is able to get away with it and escape the wrath of the IRS, they may still feel the effects on a personal level, according to USA Today. Many banks and financial institutions look to a person’s taxes and income when making lending decisions. Underreporting how much money they made can result in the person not qualifying for things like mortgages and auto loans. Therefore, anyone looking to lower the amount of the taxes they owe will likely be much better off by doing so legally.