The laws surrounding taxation are so complex in the country that one cannot fault Ohio residents for getting confused when going through the relevant paperwork. Many end up making a mistake while trying to comply with the law and the question that comes up then is: is it income tax fraud or negligence?
Income tax fraud takes place when someone willfully, intentionally attempts to defraud the Internal Revenue Service. It can be by an individual or through a corporation, although, the IRS estimates that individual taxpayers commit 75 percent of income tax fraud. Examples of fraud include willfully failing to pay taxes due, intentionally failing to file a tax return, preparing and filing a false return and making fraudulent or false claims.
On the other hand, when someone makes an honest mistake because of the complexity of the codes, the IRS will assume it was not intentionally done. Even where an honest mistake is made, however, it is in the IRS's discretion if they want to fine the taxpayer.
If someone is found guilty of income tax fraud, they may find themselves facing severe penalties. For example, a false statement could lead to imprisonments of up to three years and fines of up to $250,000. They would also have a felony on their record. An attempt to evade or defeat paying taxes could lead to a prison sentence of up to five years.
Convictions are life changing. This is why charges relating to white collar crimes, such as tax fraud, should be taken seriously and fought aggressively as soon as possible.