The thought of paying taxes may not be anyone’s idea of a good time, and some people in Georgia make decisions to purposely report improper information on their tax returns so they do not owe as much money. This is known as tax evasion. This is different than tax avoidance, and there may be serious federal charges for those who intentionally fool the Internal Revenue Service.
According to Investopedia, tax evasion, also known as tax fraud, costs the government millions of dollars every year. As a result, the consequences for getting caught may include fines, interest, penalties and potential imprisonment. The IRS understands the tax code can be complicating and confusing, and they know some tax preparers make mistakes, so this is not the same as tax evasion. Examples of fraud include:
- Claiming personal-related expenses as business ones
- Falsely claiming credits or deductions
- Purposely underreporting income
- Failing to report cash payments either as payer or payee
- Purposely failing to withhold federal income tax from worker paychecks
- Intentionally failing to report payroll tax reports
- Purposely not paying tax debt owed
Most people would like to pay the least amount of taxes as possible, and the Motley Fool discusses some legitimate ways to minimize taxes owed, and this in known as tax avoidance. People may contribute to a retirement account to defer taxes, and this is perfectly legal. There are also a wide variety of business expenses that the IRS identifies as legitimate deductions, and there are additional credits and deductions that individuals qualify for.