White-collar crimes in South Carolina include several categories of non-violent actions like money laundering, ID theft and tax fraud. It involves the perpetrator knowingly and willfully trying to deceive to benefit themselves. These crimes come with fines and may include prison terms, but they aren’t always committed intentionally.
Tax fraud vs. evasion
According to statistics, 17% of U.S. taxpayers don’t follow the tax codes, and only 1% actually get convicted of fraud. Evasion and fraud are often used to mean the same thing, but they differ.
Tax fraud refers to a business or single tax payer being willfully negligent or willfully attempting to avoid paying more taxes by illegal means. An example of tax fraud includes listing false dependents or reporting too many deductions they didn’t earn.
Tax evasion is intentionally trying to avoid paying taxes by misusing legal means, and it commonly results in a federal offense. Examples of evasion include lying about income, hiding assets or cash accounts overseas, paying employees in cash and not reporting it to the IRS or filing no return. Employees may be paid in cash, but it has to be reported to the IRS in payroll taxes.
How tax payers accidentally commit fraud
Tax auditors have the training to recognize fraud, but they know a tax payer can accidentally or neglectfully commit fraud due to the complexity of the codes. One way a tax payer may commit negligence fraud is omitting an important form or listing the wrong Social Security number. Certain tax deductions need a specific form attached to the return, and personal data should be correct.
Some taxpayers may claim the Earned Income Credit, which helps low-income earners. However, claiming it when they didn’t fall in the required income range could trigger an IRS investigation. It could be easy for a tax payer to list the wrong deductions by accident. While businesses are allowed to take deductions, they cannot be frivolous.
The FBI doesn’t take white-collar crimes lightly, especially tax fraud that involves ID theft. If a tax payer feels they have been falsely charged, they have the right to a defense attorney to help fight the charges.