It should come as no surprise to most Californians that there are a surprising number of myths surrounding the filing of taxes. Tax forms are complicated, and you may have been given false advice by well-meaning friends or associates when it comes to filing your own taxes. It is important to discern the truth before you leave something important out of your tax return or decide not to file at all, or you could face penalties from the Internal Revenue Service.
California residents know that they are some of the most-taxed citizens in the nation making it important for them to understand and use the tax deductions and other tools available to them to avoid paying more than their fair share. While this is something people across the country do and is part and parcel of the system as it is created, there can sometimes be a fine line between what is a legitimate effort to reduce a tax burden and what may lead to criminal charges.
For many self-employed people in California who have multiple clients and are sometimes paid in cash, keeping records for taxes is a hassle. However, according to Chron.com, failing to provide all the information to the IRS at tax time can result in disaster.
The IRS involves itself in criminal investigations that have to do with money. So, if a federal agency believes that you may be involved in a money laundering scheme, you could find yourself the target of the IRS.
Inconsistencies in tax reporting could result in extended periods of investigation from the Internal Revenue Service, and worse, actual charges for tax evasion. Despite the severity of these charges, incidents such as these are rarely black and white. Lack of straightforward paperwork does not necessarily point toward this crime, but details involving recent modifications to taxation and other information can help Californians clarify an otherwise uncertain predicament.