What happens if you suspect your boss is engaging in tax evasion? Tax evasion is a serious federal crime.
Tax evasion involves way more than missing tax filing deadlines. A U.S. citizen commits tax fraud when they consciously conceal their assets to avoid filing their taxes. Can you, an employee, get implicated if you know about your employer’s tax evasion and stay silent?
Does your knowledge make you liable?
Luckily, as an employee, you cannot be held liable for your employer’s tax evasion if you didn’t directly participate in the evasion scheme. Therefore, simply knowing what your employer has been doing to cheat the IRS will likely not get you in trouble.
However, you might get in trouble with the IRS if your employer asks you to falsify income records for the enterprise and you oblige. For example, you can be charged with tax fraud yourself if you actively participated in creating fake invoices for the business.
Additionally, even if you weren’t in the room when your boss was scheming but you knowingly assisted in achieving their goal, you can get in trouble with the IRS. For instance, suppose you hear whispers about tax evasion within your company and then knowingly shred incriminating evidence; you may suffer legal repercussions.
In rare cases, you may also be held liable for negligent behavior that facilitated your employer’s efforts to evade tax. This is applicable if you’re in a high-authority position in your company. For instance, suppose you, as the company’s in-house accountant, willfully ignore red flags that indicate the company’s efforts to evade taxes instead of rectifying them; you could be found negligent and face penalties.
How to know if your employer is evading taxes
It can help to know the typical tell-tale signs indicating that your employer might be evading tax. Some fraudulent activities that might give your employer away may include:
- Underreporting income
- Inflating deductions
- Hiding money in offshore accounts
- Not filing tax returns at all
You should know that tax evasion cases are persuaded aggressively at federal and state government levels. Therefore, you may be better off consulting a legal representative with the information you have; they can guide you on the best course of action to help ensure you don’t unknowingly incriminate yourself.
Being aware of your company’s efforts to evade taxes can be a damning piece of information to have. Instead of burying your head in the sand, you should speak with a legal team in Texas. They can help ensure you don’t get in trouble for your employer’s wrongdoing.