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Examining what it means to make a willful violation of tax law

Georgia residents may be interested in an article discussing what the IRS views as willful violations versus innocent mistakes. This standard may be different than what most taxpayers think and the consequences can be harsh if careful attention is not paid.

The IRS says that, in order to be considered willful, a violation of a legal duty must be made intentionally. This means that when taking the action with regard to taxes, the person was aware of the legal requirement yet chose not to comply with the regulation instead. This can also be implied by a person's conduct. If there is a pattern of behavior that shows an intention to conceal funds or deceive the IRS, the agency may infer that there is a willful violation. This can include setting up trusts or other vehicles to shield assets, visiting an offshore bank in person or even moving money from one bank to another.

The difference between an innocent and a willful violation can be very large as far as penalties go. Willful violations can bring with them heavy monetary penalties and even jail time in some cases. Often, one violation can be explained as an innocent mistake. When there are multiple violations that show a pattern, however, this can escalate the problem. Even the failure to find out what is required can be seen as a serious violation, constituting willful blindness to the law.

In order to help ensure that a person's complex tax issues are handled properly, an attorney may be able to assist. The attorney may be helpful in examining a client's assets and other finances and can provide representation during an IRS audit or appeal. This can potentially lead to avoiding a tax lien or levy.

Source: Forbes, "What IRS Calls 'Willful' May Surprise You--And Mean Penalties, Even Jail", Robert W. Wood, June 30, 2014

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