Small business owners need to know their market, their product and how to keep their customers happy. They also need to know how to follow local and federal regulations. These extend to include tax laws.
Unfortunately tax laws are not always easy to follow. But what happens if you make a mistake? What if you forget to pay your business taxes? We touched on the importance of filing payroll taxes and the potential repercussions that can result when business owners forget in a previous post, available here, but this is just part of the equation. The Internal Revenue Service (IRS) has many additional requirements for business owners.
In a recent example of how serious the IRS takes these requirements, the agency went after a Georgia business owner for failing to accurately report his business’ income. Since the income was not reported correctly, the United States Department of Justice (DOJ) claimed the business owner had filed fraudulent tax returns — a serious accusation. Allegations of tax fraud should raise a red flag. These are criminal charges that come with more than just a bill and an additional financial penalty.
A conviction for tax fraud can come with prison time.
When faced with the allegations, the business owner chose to accept a plea deal. Instead of facing much more severe penalties, he now faces up to 5 years imprisonment as well as restitution and additional fines.
Those in similar situations have options. It is important to review previous tax filings if accused of tax fraud or failing to properly report income and look to see if you have documents to support the claims you made on those tax forms. An attorney can help with this process and discuss this and other options to build a defense against these charges.