Running your own business can be profitable and extremely rewarding. Nonetheless, it also comes with big responsibilities.
One of your main legal duties will be to pay your tax contributions when required to do so. A willful failure to honor your tax obligations could result in accusations of fraud. If you are found guilty of business tax fraud then it can have serious ramifications for both you and your company.
Below are a couple of examples of scenarios that can lead to accusations of business tax fraud.
Making out that you earned less
Financial success comes with a price, you have to pay more taxes. Some business owners try to get around this by knowingly underreporting their yearly income and claiming excess deductions in order to lower taxes. The problem is that such conduct can result in some very serious accusations of tax fraud. It’s critical that all tax rules are followed, and accurate financial records are maintained.
Paying employees “under the table”
You may have a team of employees that you need to look after. All of your employees should be properly for numerous reasons, including confirmation of identity, ensuring that the appropriate taxes are withheld and paid. Some businesses try to get around these obligations by not having their workers on the books and paying them cash in hand. The Internal Revenue Service (IRS) takes this very serious and such conduct could result in allegations of tax fraud. In many cases, the IRS will often seek to hold responsible officers personally liable.
There is a difference between engaging in fraud and making an honest mistake. You shouldn’t necessarily be penalized heavily for the latter. To defend yourself from allegations of tax fraud, make sure you seek some legal guidance.