FORT LAUDERDALE, Fla.—The Supreme Court ruled that filing a false tax return is an aggravated felony and it may cause the automatic deportation of legal residents.
The ruling took place after a Japanese couple, Akio and Fusako Kawashima, was charged by the IRS with filing a false corporate tax return. The couple pleaded guilty and agreed to pay the amount owed to the IRS, but immigration authorities decided to deport them more than a decade later.
The Kawashimas are lawful immigrants, but according to the Supreme Court, individuals who defraud the IRS for more than $10,000 should be deported regardless of their legal status in the country.
The Supreme Court’s ruling is a warning for millions of legal immigrants in the United States who may face deportation if they fail to file their tax returns accurately. Those who are landlords or business owners face higher risks of attracting authorities’ attention due to the fact that they may owe large sums of money to the IRS.
Experts at Consolidated Credit Counseling Services, Inc., offer the following advice:
- Choose a reliable tax preparer: In some cases taxpayers may not be aware of false expenses or income on their tax return. In an effort to provide a big refund for clients, tax preparers may inflate or omit numbers to benefit taxpayers with a generous refund. However, since taxpayers are responsible for signing and reviewing their tax return, concealing or disguising information may result in legal consequences that range from paying fines to going to jail. For this reason, taxpayers should always review their return before signing it and make sure the tax preparer is an accredited tax preparer, certified public accountant (CPA), licensed public accountant, or tax attorney.
- Don’t conceal or transfer income: Immigrants tend to have accounts outside of the U.S. and many transfer part of their income to those accounts. Income always needs to be declared regardless of where the accounts are. The same situation occurs with properties. Immigrants are not always aware of paying all their property taxes. You need to pay taxes on all your income, including properties that may be far away from the United States.
- Pay taxes on extra income: Immigrants may not be sure about their income. Many times they can get a fixed salary during the year, but they may also receive additional income that is omitted in the tax return. For example, they may do freelance work for companies that don’t deduct taxes from their paychecks. If taxpayers don’t pay taxes on the extra income, they are falling into tax fraud territory. It is crucial to track extra income received throughout the year. An effective way of keeping finances organized is by creating budget worksheets for income and expenses.
- Over-reporting the amount of deductions: Deductions may be confusing for taxpayers, especially for those who are new in the country. There are different rules about what’s deductible and what’s not; taxpayers may be claiming too many deductions and in some cases repeating them. Visiting the IRS’s website about what you are able to deduct can clarify matters. People can call the IRS at 1-800-829-1040 if they have questions.
- Be aware of phishing: This scam has increased significantly over the last few years and affects individuals filing their tax return. The most common scam that taxpayers need to be aware of is an e-mail that claims to be from the IRS or a similar governmental organization. The e-mail asks individuals for personal information such as social security number and address then the information is used for fraudulent purposes, including false tax returns. In order to avoid identity theft phishing scams, don’t provide any financial information through e-mail, no matter how real the e-mail looks. Instead, call the IRS to make sure they requested the information.
About: Consolidated Credit Counseling Services, Inc., founded in 1993, is one of the nation's largest credit counseling organizations in the country and has helped over 5 million people with financial issues. Their mission is to assist families throughout the United States in ending financial crisis and solving money management problems through education and professional counseling.