Can someone be prosecuted for perjury for lying about their income on their taxes?
Question: I helped my father with his tax return. While reviewing the return he filed last year, I saw that he lied about his income. Could he be prosecuted for perjury? Do I have to report him?
Answer: Although it may be hard to believe, federal courts have found that lying on a tax return is not perjury. The courts have held that a tax return is not sworn testimony and so could not be perjury, which occurs when a witness testifies falsely under oath. So, for example, if your father had been involved in a lawsuit and was shown the tax return while testifying under oath, he would have committed perjury if he testified that the false tax return information was accurate.
In any event, you do not have to report your father. In fact, even if your father had lied under oath in court and definitely committed perjury, you would have no obligation to report that he had done so.
Attorneys, on the other hand, have an obligation to disclose perjury when they know it has or is likely to occur, but that does not seem to be your situation. But even a lawyer would not have an obligation to report a client for filing a tax return containing false information based on it being perjury, according to the court holdings mentioned above. And the attorney-client privilege complicates any reporting obligation even when an attorney knows that a client has committed perjury. For more information on that subject, see Perjury.
Of course, it is still a bad idea to lie to the IRS for other reasons, such as the possibility that your father could be charged with filing a false return and face criminal sentences, penalties, and fines. It is possible that your father has violated other laws and regulations. He definitely should see a tax lawyer.