What is Tax Fraud? [are you unintentionally committing it?]

Before you start to panic, understand that committing tax fraud involves more than making common mistakes on your income tax return. But there are numerous types of tax fraud and evasion that could result in civil or criminal penalties.

The Internal Revenue Service (IRS) treats fraud and tax evasion seriously.

If they conduct an investigation and discover substantive evidence against you, a civil tax matter can become a criminal tax prosecution resulting in criminal charges and your arrest.

Keep reading to learn more about how tax fraud is defined, common types of fraud, civil vs. criminal fraud, and penalties involved for committing it. We’ll also touch on what to do if you’re charged with tax fraud.

What is Tax Fraud?

The government distinguishes between negligence and fraud. If you commit tax fraud, you’re deliberately making false statements and attempting to avoid your obligations to make tax payments.

Tax fraud requires an intentional dishonest act. It includes examples such as submitting a dishonest tax return or failing to file a return.

According to the IRS, fraud involves someone willfully submitting false documents or statements in connection with a return.