Information in your tax returns is deemed to be truthful by the IRS because you declare that you have filled up your forms without deceit. If you committed perjury, your action will result in heavy punishment. The Internal Revenue Code (IRC) has two types of punishment for perjury violations – a misdemeanor and a felony. Also, every false document filed constitutes a separate count of the offence and each count carries its own penalty. It is considered a felony and we’re talking about maximum three (3) year prison sentence and a fine of up to two hundred and fifty thousand dollars ($250,000 USD) for each count of perjury.
In case you’re wondering what constitutes “perjury”, here are the specifics:
• Understating income or overstating deductions
• Inflating capital expenditures and depreciation deductions
• Reporting a source of income known to be false
• Giving a false answer on the foreign bank account question on the tax return
• Giving false information on Form 656
• Not listing all assets on a 433-A
This is not an exhaustive list by any means. In addition, if you abet the act of perjury you are also liable to penalties even if you were not the person who signed the forms. It’s also up to three (3) years in jail and a fine of up to two hundred and fifty thousand dollars ($250,000 USD).
Here’s what the IRC deems a felony – Anyone who willfully delivers or discloses to the IRS any list, statement or other document, known by him to be fraudulent or to be false as to any material matter, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both. This is generally meant for taxpayers who submit false documents to the IRS, which are not submitted under penalty of perjury, for example a taxpayer who submits a false document to an IRS agent in the course of an audit.
If you’re a taxpayer who has not been declaring your income honestly the past few years and you now decide you want to fully declare your past income, you must exercise extreme caution, especially if you are declaring for three years or more and owe more than $75,000 in taxes. The tax returns you will be submitting will be signed under the penalties of perjury and if the IRS later proves that you omitted income or made your deductions fraudulently, the US Attorney will try to prosecute you under multiple statutes such as section 7201 for tax evasion, section 7206(1) for tax perjury violations and section 1001 for the general false statement statute.
So perjury and its related issues are matters of grave concern. If you need any advice on these matters, call us at (813) 229 7100 for a free consultation.