Unless you list yourself among those who make their living working as accountants, chances are, you may not completely understand every aspect of filing your taxes. Tax rules are complex and constantly changing. That fact can make it tremendously difficult for average Americans to make sure they do everything right.
Taking steps to ensure accuracy is essential when filing your taxes, however, as any errors you make may attract the unwanted attention of the Internal Revenue Service. So, what can happen to you if you lie, omit or otherwise make an error on your taxes this filing season?
You can become the subject of an audit
No one wants to hear they are now the subject of an IRS audit. Arguably one of the easiest ways to attract the organization’s attention, however, is to fail to report all your earned income. The IRS has copies of every tax form you receive, so you really have no choice other than to list all income earned during the tax year when you file.
You can face considerable fees and fines
Lying or omitting information on your taxes can also leave you facing steep fees or fines. For starters, you can face late fees for not submitting enough money in taxes by the tax deadline, and you may also face interest charges based on the amount you underpaid. While fees and fines are undoubtedly a hassle, in some cases, you may also face criminal repercussions for your actions.
You can have trouble obtaining loans
Being less-than-truthful on your taxes can also come back to bite you when you try to secure a loan for a house, car or what have you. For instance, if you apply for a mortgage after lying on your taxes, the mortgage company will obtain copies of your tax returns. The loan officer may be remiss to offer you a loan if it appears you were not upfront when filing.
Lying on your taxes has serious ramifications, and this holds true even when your errors occurred out of a lack of proper information, rather than intentional malice.