Evading Taxes on Your Tax Return – The Money You Save is Not Worth the IRS Problems You End Up Causing Yourself

In economic times when people are strapped for cash, it is tempting to cut corners when filing taxes in order to save some of your disposable income. After all, small tax savings from many different areas can add up to a substantial amount of money. However, no matter how tempting tax evasion may seem – whether it is small or large in sum – it is a terrible financial strategy for saving your money. Tax evasion is a severely punishable act and you will find yourself in very deep tax trouble with the IRS if you choose this route.

Recently, the IRS found a man guilty of attempting to evade both his personal taxes and FICA taxes by deliberately misreporting his income. The trail of evidence led to his guilty conviction.

CCH (http://tax.cchgroup.com/) reports:

Evidence Supported Conviction for Attempted Tax Evasion (Platts, CA-3)

June 22, 2009-An individual was properly convicted of willfully attempting to evade personal taxes and FICA taxes owed by his corporation because evidence at trial established the individual’s willfulness, the existence of a tax deficiency and an affirmative act constituting attempted evasion of the taxes. The government showed that the individual mischaracterized income he received from the corporation as a loan repayment, claimed unsubstantiated capital loss deductions on his return and recruited a bookkeeper to make the company’s tax documentation reflect that he did not receive a salary. Moreover, the individual, as the corporation’s sole shareholder and president, was responsible for corporation’s unpaid withholding taxes, but sought to avoid the tax liability by under-representing his assets and failing to disclose his income from other business ventures.

Instead of illegal tax evasion, it would be wise to invest time to learn what is legally tax-deductible. You may find that there are many ways through which you will be able to pay less tax and save money. Of course, it is also extremely important that you do not mischaracterize your personal expenses (not tax-deductible) and business expenses (tax-deductible). If you categorize your personal expenses as business expenses, you are committing tax crime and may be penalized by the IRS.

Follow me on Twitter: @taxresolution

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5 Responses to “Evading Taxes on Your Tax Return – The Money You Save is Not Worth the IRS Problems You End Up Causing Yourself”

  1. Discharging Taxes and Penalties in Bankruptcy: How Delinquent Tax Returns Can Affect Your Eligibility | Tax Relief Tips from the Experts at Tax Resolution University Says:

    [...] A debtor’s pre-petition tax liabilities were not dischargeable in bankruptcy because he willfully attempted to evade or defeat paying his taxes. The record revealed the debtor had placed property in another person’s name in an attempt to conceal assets from the IRS, a pattern of failing to timely file tax returns and pay taxes and conduct that amounted to a willful attempt to evade or defeat payment of taxes. [...]

  2. Claiming False Tax Deductions on Your Tax Return Will Bring Severe IRS Penalties | Tax Relief Tips from the Experts at Tax Resolution University Says:

    [...] money you save by trying to claim excess deductions (that are not entitled to you) is not worth the IRS trouble you will bring [...]

  3. IRS Tax Problems: The Guilty, The Innocent, And What to Do When You’re Caught in IRS Crossfires | Tax Relief Tips from the Experts at Tax Resolution University Says:

    [...] is all of the sudden taxable. If you inherit money and do not pay taxes on it, you are committing tax evasion and will be punished as [...]

  4. Lewis CPA Says:

    I think the problem comes at tax refund time. They get a big refund and then spend it on something they don’t need. So, the issue is that the mentality that would tell you to save the refund is the same mentality that tells you it is better to get the money early and save it then.

  5. IRS Problems for Tax Evader Convicted of Underreporting Income | Tax Relief Tips from the Experts at Tax Resolution University Says:

    [...] sure that you’re following the rules when filing for taxes. The money you save from tax evasion is not worth the IRS tax penalties that will be imposed on you when you get caught. Don’t [...]

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