As anyone will tell you, when it comes to taxes, it is all in the details. The information you provide has to be accurate and, to the best of your knowledge, truthful. Even the smallest mistake can have massive repercussions in the form of a tax audit or a tax lien. No one wants to deal with these things, but if you are involved in an audit or if a lien applies to you, then you must deal with it swiftly and accordingly.
Even the definition of similar-sounding tax terms come down to the details, and today we are going to discuss this very subject. What is the difference between tax fraud and tax negligence?
The simplest distinction between these two terms is that one is performed "willingly" and the other isn't. Tax fraud means that the taxpayer knowingly, willingly and/or with intent, submitted tax information that was incorrect or false so as to defraud the Internal Revenue Service. Tax fraud is a very serious offense that can not only cost you in civil court, but also in criminal court as well.
Tax negligence, on the other hand, is when a taxpayer makes a mistake on his or her taxes and, though they probably should have realized or known about the error, the mistake doesn't rise to the severity of fraud. Maybe you overstated your deductions or underreported your income, or you concealed the transfer of some income. These are still problematic issues that will raise questions about your filing, but they may not necessarily reach the level of tax fraud.
Source: FindLaw, "Income Tax: Fraud vs. Negligence," Accessed May 11, 2016