It’s very common for people to worry about making mistakes on their taxes. Whether you are filing for personal reasons or as a small business owner who is filing on their own, you may be concerned that an error is going to open the door for criminal charges. You worry the IRS will think you were trying to defraud the government of the tax money that is due, and you could face serious criminal ramifications, including fines or even jail time.
But is this actually true? In most cases, it is not. Simply making a mistake on your taxes is not a criminal offense. The IRS is not going to pursue charges or anything of this nature. You may be accused of negligence or the violation may trigger an audit, so there can be ramifications. But it’s much different than committing a financial crime.
When does it become criminal?
When tax issues turn into potential criminal events is when they aren’t mistakes at all, but intentional acts. Much like with other serious crimes – such as arson or murder – intent is a crucial part of the process.
Say that you have four different income sources, but you only list three of them on your taxes. If you did that intentionally because you didn’t want to pay the full amount that was due, that may be criminal. But if you simply forgot to include one of the income sources because you didn’t get the paperwork in time, and you didn’t realize it when you were filing your taxes, that’s just a negligent mistake. People make all sorts of errors on their taxes, from overlooking income to making mathematical errors to filling out the paperwork incorrectly.
That said, it’s natural to feel concerned when dealing with the IRS. Be sure you know exactly what legal options you have.