April offers a kiss and a slap for New Jersey residents. The weather breaks in spring’s first full month just in time for the federal tax filing deadline. No one enjoys paying the tax man, but most Westfield residents grudgingly agree that taxes are unavoidable.
White collar crime and tax evasion are gentle terms for what the Internal Revenue Service considers fraud. Taxpayers who try to hide or keep money that governments believe belongs to them can face hard punishments — fines, penalties and even imprisonment. Sometimes the IRS cannot tell whether a tax return contains a deliberate or innocent mistake.
Tax laws are complicated, which is why many individuals trust tax preparation services. Most professional tax preparers are reliable. When taxes are inaccurate, it is not usually the tax preparer who suffers penalties. The blame is placed upon the taxpayer who signs the return.
The IRS’s Newark office recently publicized several criminal prosecutions, including the case of a Jersey City man who ran a tax preparation business. The tax preparer found all sorts of deductions for his clients. Unfortunately, the deductions were falsely inflated. The man also admitted he never reported his business income.
IRS audits strike fear in the hearts of taxpayers, not necessarily because they are guilty of a serious crime. It is frightening to be suspected or accused of a felony. It is also costly for an individual to defend a tax position when he or she had no part in preparing a tax return.
The IRS wants to prosecute “willful” tax violators, not taxpayers who make mistakes. Government officials recommend that taxpayers thoroughly review tax returns before signing and filing them, whether the returns are personally prepared or handled by a third party.
To ensure that a tax return is correct, many New Jersey taxpayers take the extra step to have the form reviewed by a tax attorney before filing the document.
Source: accountingtoday.com, “IRS Criminal Investigation Warns about Tax Preparer Fraudsters,” Michael Cohn, April 5, 2013
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