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The difference between tax fraud and negligence

New York residents, like all other citizens of the country, are required to pay yearly taxes to the government. However, everyone is human and sometimes people make mistakes. In these situations, it's important to be able to differentiate between tax fraud and tax negligence.

FindLaw states simply that not all violations of tax law are considered tax fraud. If a person has been charged with tax fraud in some form, then it implies that the IRS has assumed that their actions were committed intentionally, and that they had the idea to evade payment in taking those actions.

Tax negligence, on the other hand, are actions that indicate forgetfulness or otherwise unintentional breaking or evasion of tax laws. For example, a slight error in reporting annual income looks more like negligence than falsifying personal expenses or using an incorrect social security number, which are more indicative of fraud.

H&R Block states that those most likely to be targeted by IRS for tax negligence or fraud are those who understate their owed payments. This includes those who don't file tax returns at all, as well as those who misreport their deductions, credits, and income.

It should be noted that it's very rare for even those determined guilty of tax fraud to face penalties like jail time. However, legal strain and large sums of money that may be lost in the form of fines are both very real possibilities. For that reason, it's important to keep up to date with tax information and look over tax forms multiple times before filing.

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