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Is it a crime to make a mistake on your taxes?

On Behalf of | May 15, 2024 | Tax Law

Whether you’re doing taxes as a business owner or an individual, you’re expected to do them correctly. You may not officially have any training or education regarding how to do your taxes, as most people don’t. But there’s still an obligation to follow the regulations the IRS has laid down and to pay the taxes that you owe.

This makes some people relatively nervous. They worry that they’re going to make a mistake or an error accidentally and then find themselves facing criminal charges after an audit. They believe they’ll be accused of trying to defraud the government and they could face jail time or excessive fines and other monetary penalties. Is this true?

Mistakes are not criminal

No, this isn’t true and the reason is that an honest error isn’t a criminal act. It may still be a mistake that needs to be rectified. In some cases, certain fines may need to be paid.

But for something to be a tax crime, it has to be done intentionally or willfully. There’s a big difference between making a mathematical error on the paperwork and intentionally altering your taxes so that you don’t have to pay the amount that is due.

If you have willfully tried to reduce your tax liabilities through forgery, fraud, misrepresentation or other means, you could face criminal charges. But if you’ve just made an honest mistake when you were trying to do the job correctly, criminal charges are not something you have to worry about.

However, this does help to show how complex taxes can be and how important it is to understand the legal steps you can take when facing an audit or allegations of fraud.