As a business owner, you need to do all you can to gain a competitive advantage. Otherwise, you soon might not have a business at all.
Yet, you need to be careful not to cross the legal line; otherwise, you could face serious white collar crime charges such as fraud. Here are some instances of what a federal court would consider illegal:
1. Misclassifying employees as independent contractors
Paying someone as an independent contractor can certainly make things easier for you in the short term, as registering them as an employee requires more paperwork and more financial commitments. Yet it could work out incredibly expensive if you are caught.
2. Claiming illegible tax deductions
One of the great things about running a company is that you get to write off many expenses against tax. Yet even a simple mistake, such as claiming too much of your car expenses as business versus personal use, could lead to a comprehensive investigation and criminal charges.
3. Not declaring all your income
If a client asks if you can do a job for cash, you need to consider the potential consequences if found out. You won’t be able to work at all if you are sentenced to jail time.
While you may have friends who have been doing some of these things for years and have never been caught, it doesn’t mean you should. The Internal Revenue Service catches people every year. If that happens to you, it could ruin all the hard work you put into building your business. Seek legal help if you are unsure of the legitimacy of certain options or if you have already been caught out and need to defend against the charges.