Wesley Snipes Indicted for Tax Fraud
Newsday reported today that actor Wesley Snipes has been indicted for federal income tax fraud for claiming $12 million in refunds for 1997 and 1997. Today is also the 75th anniversary of the date that mobster Al Capone was sentenced to 11 years in prison for income tax evasion. He served 8 years.
While I don’t see a lot of outright fraud by clients coming into my office, I have had many clients who have neglected to file their tax returns, sometimes for many years. One even had the returns prepared by a CPA, with envelopes ready for mailing, and never bothered to sign the returns, write a check and stick them in the mail. Penalties for failure for file returns and failure to timely pay taxes are 5% and .5% respectively of the tax due per month for up to 5 months, so the penalties can easily 25% of the tax! The interest adds up quickly also.
So, not only is it important not to cheat on your taxes, but also to make sure you file and pay on time!