At Verity CPAs, we believe in educating our clients about the significant consequences of tax fraud. One of the most severe repercussions is the civil fraud penalty, which can have a profound financial impact.
The civil fraud penalty imposes an additional 75% penalty on the underpaid tax due to fraud. This is on top of other penalties and interest you might incur, often resulting in paying more in penalties and interest than the tax itself.
A noteworthy observation from a former IRS agent within the accounting community highlights that this penalty is primarily applied for underreporting income or assets, rather than for overstating deductions or failing to provide proper deduction documentation.
It is crucial to understand that the key takeaway is not to manipulate deductions, but to ensure complete and accurate reporting of all income and assets in your tax filings.
At Verity CPAs, we are committed to helping you stay compliant with tax regulations and avoid such hefty penalties. For professional guidance and support in navigating the complexities of tax laws, contact us at info@verity.cpa or 808.546.5026.
Trust Verity CPAs to safeguard your financial interests with integrity and expertise.
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