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The importance of intent in tax fraud

On Behalf of | Jan 28, 2022 | Tax Debt

No one in Georgia wants to pay more in taxes than they are required. There are many ways to legitimately minimize personal income tax, including through deductions like claiming dependents and business expenses. However, the Internal Revenue Service will carefully consider someone’s intentions when trying to minimize taxes, including whether those intentions and actions were potentially illegal and constitute tax fraud.

Was it a mistake?

Filing taxes is confusing. No matter how hard someone might try to get things right, mistakes are often inevitable. A mistake is not a criminal matter when it comes to filing taxes, though. This is where intent is important.

When someone intends to commit tax fraud, he or she takes purposeful action to misrepresent his or her situation. Accidentally underreporting income is not a crime, whereas purposely underreporting income is. Other examples of intentional tax fraud include:

  • Inflating business expenses
  • Maintaining two sets of business expenses
  • Accepting cash payments without depositing them into accounts
  • Claiming a spousal exemption when single
  • Claiming a dependent exemption when not providing support
  • Hiding financial accounts

Tax season can be stressful, and many Georgia residents struggle to accurately prepare their tax returns in a timely manner. Small mistakes here and there are almost inevitable, but this does not mean that it is a criminal matter. Anyone who is dealing with accusations of tax fraud should be sure to understand the issue of intent with these types of charges, as it could play a pivotal role in the construction of a strong criminal defense foundation.