will i get in trouble if i claim losses on a business i do not have just to get some tax money back?? i did it last year i got 5k back a lot of ppl tell me i will get into a lot of trouble what should i do??? will the irs found out if they do what is the penalty? please help
2007-03-10 03:14:51 · 5 answers · asked by PILOT 1 in Business & Finance ➔ Taxes ➔ United States
File an amended return. Make it right before the IRS finds it! Go to a tax professional to give you tax advice and show you how to do proper record-keeping. This link will give you an idea what you're up against.
http://www.irs.gov/compliance/enforcement/article/0,,id=106790,00.html
good luck
2007-03-10 03:37:57 · answer #1 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 0⤋
That is called fraud. They will send you to jail for that! There are many legals ways of lowering your tax liability or increasing your refund without lieing. Reserach IRA contrabutions, the telephone excise tax credit, possible unclaimed dependents, charatable contributions, Earned Income Credit.
The IRS closely monitors the losses claimed by businesses. There are strick rules about deducting losses. If you continue to deduct losses, they will probably try to reclassify the business as a hobby. Once they start digging, they will catch the lie...and well they don't smile on that!
2007-03-10 11:59:04 · answer #2 · answered by Rebekah 1 · 0⤊ 0⤋
Yes, you can get into trouble filing a fraudulent tax return. You might get away with it for awhile, but could get caught at some point, and have to pay it all back, plus interest and fines. Prosecution and prison time is also a possible consequence, but the most likely result for small amounts would be financial penalties, including having your assets seized.
It's just not a good idea to steal, and this is stealing. Would you ask what would happen if you robbed a bank? Same thing - you might get away with it, but if you do it long enough you could well get caught and face unpleasant consequences.
2007-03-10 11:30:18 · answer #3 · answered by Judy 7 · 3⤊ 0⤋
You may get away with it for a while, but once they catch you. They'll go over the past few years with a fine tooth comb.
The amount of penalty (and interest) depends on the amount of your fraud. Tax fraud, by the way, is a FELONY.
There are safer ways to get extra money.
Don't @#$$ with the IRS!
2007-03-10 11:22:04 · answer #4 · answered by ckm1956 7 · 2⤊ 0⤋
You will get caught in due course. If you keep on claiming losses, the IRS will, in any case, disallow them as they will think you just have a hobby.
I hope you are saving your extra refund to pay the high-priced lawyer you will need to keep you out of jail. Of course, that negates the benefit of the extra refund.
2007-03-10 11:55:37 · answer #5 · answered by skip 6 · 0⤊ 0⤋