Unreported income fraud occurs when a person purposely fails to report their true income when they are required to do so under law. Many different types of legal proceedings require an accurate assessment of a person’s assets and income. Failing to provide correct figures can lead to injustices or incorrect conclusions during court proceedings. Thus, state and federal laws provide strict regulations for situations involving income reports.
Unreported income may be an issue in many different types of legal proceedings, including:
- Spousal and child support
- Tax proceedings
- Business reporting claims
- Insurance claims
- Disability and workers compensation claims
- Distribution of property in a divorce case
- Eligibility for various federal benefits
For example, spousal support is generally determined by the income level of each party. If one party falsifies information or hides their assets, it can seriously alter the amount of spousal support required each month. Thus, laws are very strict when it comes to reporting income.
Generally, unreported income can lead to legal consequences if the person acted intentionally. The law makes provisions for reasonable errors or mistakes in an income report. However, if the person knew or should have known about a mistake or error, yet failed to correct it, then the failure to act could also lead to a violation.
Income report violations may lead to white collar crime penalties such as:
- Criminal fines
- Criminal sentencing (jail or prison time)
- Loss of benefits or distributions
- Loss of business operating licenses
- Unfavorable effects on future applications (for credit, employment, citizenship, etc.)
Intentionally falsifying or withholding income information is considered a serious violation. If you have any questions, concerns, or legal inquiries involving unreported income, you may need to hire a criminal defense lawyer. A qualified lawyer near you can help inform you of your rights when it comes to financial laws. Many legal disputes can be avoided by hiring a lawyer to help with income reports. Also, if you need to attend any court proceedings, your lawyer will be able to guide you through the process.