You always take your time on your taxes and double-check your figures. Authorities accused you of tax fraud recently. Do the charges stem from a misunderstanding?
Yahoo! explores accidental tax fraud and how it happens. Find out where you erred, so you know how to proceed with your criminal case.
Claiming earned income tax credit incorrectly
Before claiming another income tax credit, double-check your eligibility. If you claim the credit without proper eligibility, you could face an audit from the IRS. To avoid this type of tax fraud, do not file for the earned income tax credit if you make more than the current limit. Remember that unemployment benefits, child support, Social Security benefits and alimony do not count as earned income.
Submitting a tax return with incorrect or missing information
Before hitting “submit” on your taxes, give them a final inspection to make sure you did not miss information or include the wrong details. As you check each line, do not forget to double-check that you submitted the proper supplementary forms. For instance, if you claim an education tax credit, you must include Form 8863.
Misusing tax shelters
If your wealth planner or accountant tells you about a tax shelter that sounds too good to be real, it may not be. Tax shelters should not duplicate your current coverage, conflict with your current monetary needs and goals, or cover you for an unlikely event. If you abuse tax shelters, you could owe the IRS much more in interest, fees and back taxes than you seek to save.
Not knowing the latest tax laws may not protect you from white-collar charges. Staying well-informed could help you stay on the right side of the law.