Rosenblum Schwartz & Fry

Tax mistakes and tax evasion: Is there a difference?

Think back to the last time you filed an income tax return. Did you know exactly what you were doing, or did you have some uncertainties about how to move forward?

Like most, you don't understand the ins and outs of the IRS tax code. Instead, you simply hope that you know enough to file an accurate return.

Even if you try your best to prevent mistakes, there could come a point when you make an error on your tax return. This happens to almost everyone at some point, so you aren't alone.

There is a big difference between a tax mistake and tax evasion. With a mistake, you had no idea of what you were doing. With evasion, you put a plan of action in place to avoid paying taxes.

An example of a tax mistake is a math error on your return. With so many numbers to crunch, it's only natural for taxpayers to make this type of mistake every now and again.

Tax evasion is much more detailed, such as when you attempt to hide income in an offshore bank account. Another common example is when a person neglects to report all of one's cash earnings, such as if he or she works as a hair stylist or waitress.

What to do next

If you receive a letter from the IRS, it's important to read it from start to finish. You need to understand exactly what it says, so that you know which steps to take as the process moves forward.

With a tax mistake, you may be able to amend your return, send it off to the IRS, and leave well enough alone.

With a charge of tax evasion, the process won't be nearly as simple. You are facing a serious situation that could result in heavy fines and/or imprisonment. For this reason, you need to have a clear idea of your legal rights.

There are many differences between a tax mistake and tax evasion. If either one comes into play, learn more about what's going on and then take the right steps without delay.

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Rosenblum Schwartz & Fry

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Saint Louis, MO 63105

Phone: 314-499-1424
Fax: 314-862-8050
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