Q: Can I rectify an unintentional fraudulent mistake on past tax returns?
I moved out of the US and file my own taxes and just realized I've been filing my taxes incorrectly the past couple of years and fear that if the IRS finds out, I'll be charged with a felony. I thought I had to file based on where I practice business (I still work remotely for US clients) and not based on residency. I've been filing MD taxes based on this incorrect assumption and now have learned I'm not supposed to and I'm afraid of being found to be submitting fraudulent tax returns. Is there any way to rectify this with the IRS and possibly re-file correctly as necessary? I don't want to go to jail.
A: Criminal or civil fraud requires knowledge of the fraud and intentional conduct to perpetrate the fraud, so honest mistake is a complete defense. Stop worrying. Hire a CPA to review your past returns and file any corrected or amended returns for the affected years, as necessary. Any penalties or late fees can be paid or negotiated through your CPA. If you overpaid taxes or mistakenly paid taxes to the wrong taxing authority, you can request a refund, but you may be limited to the past three years only, as further back may by barred by the statute of limitations for such claims.
Linda Simmons Campbell agrees with this answer
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