My friend found some guy to make her a fake W-2 form that lists her income as about $20,000 more than it really was for 2006. She got about $4,000 back and the guy took half for his services. What ways could she get caught?? And what consequences could she face??
2007-05-12 06:54:09 · 15 answers · asked by Eva 1 in Business & Finance ➔ Taxes ➔ United States
**Also, what about what would happen if she turned herself in?? Would the penalties be as harsh?? See, I tried to tell her not to do this but she didn't listen. She actually didn't fully grasp the extent of what she was doing... It was her first time filing taxes and the guy just told her she wouldn't get caught because people do this all the time.
2007-05-12 07:04:11 · update #1
W2s are filed by employers with the IRS. In the past, she might have gotten away with this. Now the IRS computers will check electronically between those filed and those that are sent in by employees. If something doesn't match (and not only on W2s, but a variety of checks), the computer will kick out that return and generate a manual audit.
For mistakes, usually the taxpayer has to pay back taxes and any penalties and interest. For deliberate fraud, penalties are bigger and can (and often do) include a prison sentence as tax fraud is a federal crime. Things don't look good for her.
******
She can file an amended return. She will still be liable for penalties and fines, and may get audited anyway, but if she corrects it before she is flagged, I don't think they will prosecute her.
2007-05-12 06:59:23 · answer #1 · answered by Anonymous · 1⤊ 0⤋
I'm no tax expert, but it's called "tax fraud" and if the IRS catches her, she's gonna probably do some time. It's a felony as far as I know. The guy who made the W-2 for her is gonna end up in a world of trouble also if she gets caught. It could even be 5-10 years from now and if they randomly pull up her submitted tax information for 2006 for an audit, and someone notices the fake W-2, she could still get charges (or at the very least hefty fines). I innocently forgot to include a W-2 (for a waitress job that I only had for two days!) when my ex-husband and I filed our last return as a married couple clear back in 1987. They randomly audited me in 1995 and not only did I have to pay almost $300.00 in fines, but so did my ex-husband! Even though it was my W-2, we were still married at the time, so they fined him too!!
2007-05-12 07:05:04 · answer #2 · answered by AGT 4 · 0⤊ 0⤋
One way to get caught is have someone turn her in. Another way would be the IRS matching W-2 forms received from the taxpayer with those submitted by the employer.
I would think it would be easier to get away with under reporting rather than over reporting, as she's getting back money she never put in as taxes.
Government has been slacking up on big business tax fraud at the expense of small-time fraud. Why? Anyone's guess. Maybe big business has the money to pay tax accountants and the little guy is just stuck.
She could be audit this year, next year or even a few years down the line. This not so much a case of tax mistake or tax evasion as it is fraud. I think they would look more closely at what goes out rather than what comes in.
I hope your friend has a comfortable flight to South America and a nice villa to go to in Brazil as that's the only way that she'll not eventually be found.
2007-05-12 07:14:50 · answer #3 · answered by rann_georgia 7 · 0⤊ 1⤋
I am guessing this from getting money back from the earned income credit. If the shyster actually filed w-2s and a 941 and paid the Social Security and Medicare taxes, the IRS will probably never notice. If the shyster did not file the reports then the two will be going to jail. Go directly to Jail, do not pass go, do not collect $200.
2007-05-12 10:19:27 · answer #4 · answered by darrenwelsh429 2 · 0⤊ 0⤋
Sorry I not sure of the consequences...but I do have a question.
How would someone overstate their income on a tax form by $20K in order to get back $4K in a refund?
Do you mean that she understated her income by $20K? I could see that as providing a $4k refund. If this is the case this big refund will also trigger the IRS to impose fines for not paying enough taxes during the year.
2007-05-15 18:05:33 · answer #5 · answered by BlackEyedE 2 · 0⤊ 0⤋
The IRS matches up the employer and employee copies of Form W-2. She WILL get caught -- there is no "if" about it. This type of fraud often does lead to prosecution. She may be able to mitigate the damage by turfing out her accomplice.
The IRS does tend to go easier on people who come to them first. She'll need to pay back the money along with any penalties and interest of course; hopefully she hasn't spent it. And she'll have to give up the bozo who made up the bogus W-2.
2007-05-12 07:07:13 · answer #6 · answered by Bostonian In MO 7 · 3⤊ 0⤋
death. sike, only about 1 in 1,000 people get audited. And it's not usually for overstating income lol. That would mean she would pay more in taxes. If its an individual and a one-time small amount, she would probably just get fined. The problem is that she did it intentionally and went out of her way to find someone to do this type of thing. That could get her in trouble.
2007-05-12 06:59:01 · answer #7 · answered by acage123 3 · 0⤊ 2⤋
An IRS audit comes to mind. As does BIG penalties if they get caught.
2007-05-12 06:58:17 · answer #8 · answered by kj 7 · 0⤊ 0⤋
If it was an aaccountant or qualified person that helped you souldnt get caught out, tax office does not give money over easily
2007-05-12 07:02:55 · answer #9 · answered by angelawlkns 2 · 0⤊ 1⤋
Does this "friend" look like you, sound like you, and act like you? It sure sounds like it's you. Jail time for tax fraud is 10-15 years.
2007-05-12 06:57:33 · answer #10 · answered by sandstone901 4 · 1⤊ 0⤋