Is it wise to amend our taxes?

[Misty1980]

My husband and I bought a home this year. To get the loan we had to prove through our taxes that we made a certain amount of money. My husband got "creative" with the taxes and claimed that we made more money than we did. We got the house but now we are stuck with a high monthly tax payment that we don't really owe. I recently found out that I am pregnant and have to quit my job. The tax payment is a huge and frustrating burden. We have heard it is possible to amend your income taxes, but aren't sure if it is wise to do so. Can we get into trouble with the IRS for an error in their favor? If we amend our taxes and claim our correct income, is it likely to cause us more problems down the line? Will they want to audit us, for example? I'm not sure if it matters or not, but we live in Florida. Any help would be appreciated.

 

[TigerD]

Just to clarify: Are you worried about the penalty for false statements on your taxes, or about the penalty for mortgage fraud? Or for the mail/wire fraud you committed while participating in mortgage fraud and tax fraud?

TD

 

[Misty1980]

Just to clarify: Are you worried about the penalty for false statements on your taxes, or about the penalty for mortgage fraud? Or for the mail/wire fraud you committed while participating in mortgage fraud and tax fraud?

TD

What's the point in the existence of tax amendment forms to fix mistakes, if you are penalized for fixing those mistakes?

 

[LdiJ]

My husband and I bought a home this year. To get the loan we had to prove through our taxes that we made a certain amount of money. My husband got "creative" with the taxes and claimed that we made more money than we did. We got the house but now we are stuck with a high monthly tax payment that we don't really owe. I recently found out that I am pregnant and have to quit my job. The tax payment is a huge and frustrating burden. We have heard it is possible to amend your income taxes, but aren't sure if it is wise to do so. Can we get into trouble with the IRS for an error in their favor? If we amend our taxes and claim our correct income, is it likely to cause us more problems down the line? Will they want to audit us, for example? I'm not sure if it matters or not, but we live in Florida. Any help would be appreciated.

ARG...

Of course taxes can be amended, it happens all of the time. However, you artificially claimed income that wasn't real in order to fraudulently qualify for a mortgage. In order to successfully do an amendment you are going to have to convince the IRS that you made a credible mistake on your tax return that would result in you owing significantly less tax. I can imagine few scenarios that the IRS would buy. On top of that I suspect that your husband has been "creative" all along, which means that your return could have actually been closer to accurate than creative.

I suspect that its safer for you to live with what you have done.

 

[Misty1980]

ARG...

Of course taxes can be amended, it happens all of the time. However, you artificially claimed income that wasn't real in order to fraudulently qualify for a mortgage. In order to successfully do an amendment you are going to have to convince the IRS that you made a credible mistake on your tax return that would result in you owing significantly less tax. I can imagine few scenarios that the IRS would buy. On top of that I suspect that your husband has been "creative" all along, which means that your return could have actually been closer to accurate than creative.

I suspect that its safer for you to live with what you have done.

No, we've always been honest on our taxes. They shouldn't find anything else wrong other than this error in their favor. We are also self employed, I don't know if that makes a difference or not. I think that what he did was basically not take out any deductions for our operating expenses, etc.

 

[TigerD]

No, we've always been honest on our taxes. They shouldn't find anything else wrong other than this error in their favor. We are also self employed, I don't know if that makes a difference or not. I think that what he did was basically not take out any deductions for our operating expenses, etc.

Stop. It wasn't an error. It was an intentional act.

You need to talk to an accountant and a lawyer.

TD

 

[LdiJ]

No, we've always been honest on our taxes. They shouldn't find anything else wrong other than this error in their favor. We are also self employed, I don't know if that makes a difference or not. I think that what he did was basically not take out any deductions for our operating expenses, etc.

Artificially increasing self employment income is a huge potential fraud issue as it artificially increases Social Security Credits. The reverse is also a potential fraud issue as it decreases tax. The likelihood of an audit related to an attempt to amend Schedule C increases exponentially.

I hope that your husband's business records are impeccable, because if they are not, it could trigger a three year audit.