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Income Tax Returns Your Accountant Should Not
File |
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by: J. Stephen
Pope |
You've been feeling
uneasy (perhaps even guilty) because
you've failed to report
your under the table business
income. Perhaps you've never filed
a tax return, even
though you know you owe money. Finally, you
contact an
accountant to resolve the situation.
Although
it is commendable that you are trying to correct
matters, hiring
an accountant to do these delinquent
returns could be a big
mistake. The reason why is because
tax evasion is a criminal
offence or felony. You might
also be subject to civil action.
Would you hire an accountant to defend you in a criminal
proceeding? Not likely. You would be wise to hire a
qualified attorney.
First of all, lawyers have something
called
solicitor-client privilege (also known as attorney-client
privilege or legal advice privilege). This basically means
that things you tell your lawyer when seeking legal
advice
are confidential and can't be used against you.
Even written
records can be covered by this privilege.
On the other hand,
your accountant can be compelled to
testify against you and all
records in his possession can
be demanded by the authorities.
Second, your lawyer can prepare a legally binding
agreement that can protect you. In return for your coming
clean, the tax authorities may agree not to charge you
criminally and, in some cases, even reduce penalties or
tax
liability.
If your accountant tried to do the same thing,
they could
demand all information about you. Your accountant
would
not be protected by solicitor-client privilege.
If, say, your accountant filed your tax return from ten
years ago on your behalf, the tax authorities could still
charge you with tax evasion, despite the fact that you
are
obviously trying to rectify matters (albeit a bit
late).
It is even possible that your accountant could get into
trouble for failing to report your delinquency. On the
other
hand, your lawyer can't be compelled to testify
against you,
being protected by solicitor-client
privilege. Your lawyer may
also have his own in-house
accountant in order to protect you.
Your lawyer (specializing in criminal and tax law) will
likely negotiate an agreement with the tax authorities
before filing any tax returns.
Therefore, if there is a
good chance you could be
charged criminally for your failure to
file tax returns
or properly report income or expenses, don't
see your
accountant. Instead, consult a lawyer specializing in
such matters before you file or amend any returns.
About the author:
RESOURCE BOX:
J.
Stephen Pope, President of Pope Consulting Inc.,
has been
helping clients to earn maximum business profits
for over
twenty-five years.
For profitable Work at Home Small
Business Ideas, visit
http://www.yenommarketinginc.com/
To learn
more about income taxes, visit
http://www.yenommarketinginc.com/income-taxes.html
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