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How the IRS looks at errors

On Behalf of | Dec 10, 2015 | Tax Audits

It is not uncommon for Georgia residents to make mistakes when filing a tax return due to how complicated the process can be. If they have multiple bank accounts and investments, they may have a number of sources of income, and it might not always be clear how to report it.

It is important to note that the IRS can label errors as tax fraud or an innocent mistake. These are classified as willful and non-willful errors. Willfully evading federal income taxes is a felony, and it is not always clear what the IRS will consider to be a willful error.

Willful errors are those that are made knowing that someone is providing incorrect or abridged information to the government. However, the IRS may consider someone to have been willfully ignorant, putting themselves in a situation where they purposefully did not know the laws or details about their situation. Things that may lead the IRS to conclude someone was willfully misleading include filing certain forms but not others, inflating expenses and under-reporting income.

Dealing with taxes can be extremely complex, and it is easy to make mistakes. A person who has run into legal trouble with the IRS can face a range of penalties, even if the taxpayer made an honest mistake. An attorney who has experience with federal income tax audit defense may be able to help clients understand why they are in trouble with the IRS and assist them in negotiating to avoid harsh penalties. In some cases, an attorney may be able to arrange for a payment plan or a reduction in the amount that is owed.