Taxes

Secret Methods to Avoid Or Reduce Taxes
By Chintamani Abhyankar

There is a big difference between owing the Internal Revenue Service money and committing tax fraud. By committing tax fraud, you are deliberately supplying false or misleading information to the Internal Revenue Service in the effort to achieve some sort of gain for yourself.

Some ways you can commit tax fraud are by transferring assets or income in an effort to hide them from the IRS, claiming false deductions, claiming personal expenses as business expenses, overstating the amount of deductions, deliberately reporting a lower income than you actually earned, keeping a double set of books, making false entries in business records, deliberately omitting income, and more.

The IRS Criminal Investigations Division has a Tax Fraud Program that divides tax fraud into two categories. The categories are legal source tax crimes and illegal source tax crimes. People with legitimate employment, who choose to defraud the federal government regarding their taxes, commit legal source tax crimes. People whose income is generated by illegal activities commit illegal source tax crimes. Because of the nature of their income they do not claim taxes or they attempt to launder the money they earn by investing it in, otherwise, legitimate income sources. The criminal Division of the Internal Revenue Service considers this money laundering to be income tax evasion in progress.

Punishments and penalties for tax fraud crimes vary from case to case. There are some violations of tax law that can result in up to five years of imprisonment and $250,000 in fines for individuals or $500,000 for corporations. The IRS says that the average imprisonment for tax fraud crimes is twenty-six months in jail.

Certainly, you do not want to become involved in any sort of tax fraud crime. The attempt to defraud the Internal Revenue Service on such a scale is simply not worth the potential consequence.

On the other hand, don’t start imagining yourself doing twenty-six months for a simple error on your income taxes or an inability to pay. The last thing the Internal Revenue Service really wants to do is to throw you in jail. If they do that, they are only greatly delaying your ability to pay them what you owe.

The IRS is happy to have real criminals to prosecute because of the way it affects honest taxpayers. If you are scared that you might get caught, you are going to avoid any sort of improper filing whatsoever. For this reason the Criminal Division prosecutes the most blatant and most visible cases of fraud. Forgetting to sign your income tax or making a mistake in math hardly qualifies.

Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. His famous Tax eBook “Stop donating your money to IRS” which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax. Just visit his website http://www.planningyourtax.com/ and claim your FREE eBook

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