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Simple reporting mistakes are not tax fraud

On Behalf of | Jun 1, 2016 | Firm News |


Louisiana residents and businesses must pay taxes. Tax laws are complex, and how much individuals and businesses are required to pay is often confusing and may be unclear. When an individual or business intentionally underpays its taxes, the person or company may be charged with tax evasion.

When prosecutors are looking to pursue charges of tax fraud against a Louisianan, they are looking for signs of intentional fraudulent activity. Simple mistakes are not considered to be fraudulent acts. Tax evasion is the act of deliberately underpaying one’s taxes. A person who makes a mistake will still have to pay any taxes owed, as well as a potential fine, but this is not considered a criminal act.

Commonly, acts of tax evasion occur when an individual or business owner underreports income. For example, a person who operates in a predominately cash business, such as a waiter or hairdresser, and subsequently underreports his or her income may be charged with tax fraud. Additionally, if a family reports a larger household than is accurate in order to increase the size of its deductions, or a business reports greater expenses that it actually incurred, prosecutors may bring white collar crime charges for tax evasion against these tax filers. Additionally, a taxpayer who does not accurately report his or her circumstances may be investigated and prosecuted for tax fraud.

A Louisianan who has been charged with tax fraud or whose business has been, may wish to consult with an attorney for guidance. Despite the fact that simple mistakes are not considered to be tax fraud, prosecutors may still try to characterize these mistakes as tax evasion. Furthermore, the tax code is complex, and there may be confusion regarding what a Louisianan should report or deduct. It is essential for a Louisianan to have legal counsel in the event of an investigation into alleged tax fraud.

Source: FindLaw, “Tax Evasion,” accessed May 20, 2016