Feeling nervous about filing your taxes? Feeling stressed as you fill out the paperwork? Maybe you think that you have done it all correctly, but you’re just worried. It’s the same fear you feel when you pass a police car on the road. You know that the tax authorities have power, and you worry that they’re going to use it against you if you made any mistakes.
There is one reason to put your mind at ease: A mistake is not the same as fraud. Yes, fraud itself is illegal, and the ramifications can be stiff. But that does not mean you’ll face those ramifications if you made an innocent mistake or committed an error because you are not a tax professional.
To constitute fraud, you have to have intent. Your actions must break the law intentionally with the goal of paying less than you owe. The IRS specifically states that “Fraud cannot be a mistake or an accident, carelessness, or reliance on others.”
So, if you simply interpreted the rules incorrectly and claimed business expenses that the IRS decides are personal expenses, you haven’t committed fraud. You just misread the paperwork and thought you were honestly filing. Now, if you claimed personal expenses on purpose, knowing it was against the law and doing so anyway, that’s another story. But if you just made an error, the IRS is not going to come down on you with the full weight of the American legal system. Mistakes happen, and it’s not illegal to be careless.
That said, if you do find yourself facing serious allegations, be sure you know what legal options you have.