What Happens If You Lie on Your Taxes?

No one likes to file taxes, but it's one of those civic duties you can't ignore. Every tax season, it's wise to work with a Brooklyn tax advisor to get your ducks in a row, maximize your tax savings and put taxes behind you until next year. While tax professionals can help you do things right, some people do it themselves and fudge the truth to lower what they owe.

Of course, you should never lie on your taxes. But what happens when you do?

Tax Perjury

Let's get one thing clear: Lying on your taxes is illegal. It's a federal crime! Even white lies can get you into hot water with the IRS.

Lying on tax documents is a crime known as tax perjury. Typically, tax perjury occurs whenever an individual intentionally files fraudulent documents. You also break the law when you help someone else do so. Both the tax filer and the preparer can violate federal law by lying.

There are many instances in which the federal government will pursue perjury charges. Some common examples include misidentifying a main source of income, lying about deductions or falsely claiming a non-eligible dependent.

Tax Evasion

In serious cases of perjury, lying can teeter into tax evasion territory. Tax evasion is when someone attempts to get out of paying taxes. Your actions in lying could qualify for evasion.

What are the Penalties?

Tax perjury comes with some serious penalties. The crime is punishable by up to a year in federal prison! But that's not all. Individuals who commit tax perjury can receive a fine of up to $25,000. Corporations who commit perjury may pay up to $100,000.

If your actions turn into tax evasion, the ramifications are even worse. Tax evasion is punishable by up to five years in prison and can come with fines of up to $100,000 for individuals or $500,000 for corporations.

Do yourself a favor and file your taxes honestly. Work with a Brooklyn tax advisor if you struggle to fulfill your tax obligations. They can help you set up payment plans and find options to assist you. It's better than breaking the law, risking prison time and paying steep fines.

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