Trying to be “smarter” than the Federal Revenue Service to pay less Income Tax is increasingly difficult and can give a taxpayer a headache when caught forging tax return data. In extreme cases, the story can end in a chain.
Intentionally altering or omitting values and assets, including dependents who do not exist, reporting medical expenses or other types of false deductions, among other practices, can be considered acts of tax evasion, with a penalty of up to five years in prison. The punishment is provided for in Law 8137/90, which deals with crimes against the tax system.
The IRS currently has several systems to cross-reference information. Real estate companies, for example, are required to send a list of people who have rented or sold properties and their respective values.
Revenue Tracking includes social media
In recent years, the Federal Revenue has improved its tracking systems, collecting information provided by companies, banks, notaries, real estate, doctors, dentists and other taxpayers, to identify possible errors or inconsistencies in the data reported in the declaration.
Even social networks entered the radar of the tax authorities, which began to search the lives of taxpayers suspected of hiding assets in the declaration, but who insist on taking selfies in mansions or aboard cars, yachts and jets.
Taxpayer can rectify declaration if he makes a mistake
Of course, many people end up getting confused or simply forgetting to inform some important transactions for the IRS, but with no intention of purposefully omitting this data.
If you filled out the last-minute statement, did everything in a hurry and forgot to report the purchase of a car or the balance of an investment, for example, you don’t need to be desperate. The first step is to make a rectifying statement. See how to do it here.
If you don’t notice anything wrong with your statement, another way to check for any pending issues is to access the Federal Revenue’s electronic service system, the e-CAC. By entering the “My Income Tax” menu, you can follow the processing of your declarations for the last few years.
In the case of the simplest errors, such as an error in typing values, the Revenue explains in the system itself how the taxpayer must proceed to correct it.
Correcting errors on your own can result in a 20% fine
Depending on the error, you will have to pay a 20% penalty on the tax difference that was not correctly declared.
If the case is more complicated, you will have to schedule an appointment at a service agency to present documents and clarifications.
But even in this situation, you will be subject to a 20% penalty on the tax due, as you took the initiative to look for the Lion to correct the error.
IRS subpoena makes fine jump to 75%
However, if you are not proactive and simply wait for the IRS subpoena, the picture changes. Even if you present all the documents and prove that the error was not intentional, the amount of the fine already jumps to 75% of the tax due.
Fraud generates a 150% fine and can result in imprisonment
If it is found that there was fraud in the information provided, the taxpayer will have to pay an additional penalty of 150%. In addition, the Federal Public Ministry can denounce you for a crime against the tax order, the process of which can result in imprisonment from two to five years.