If a friend’s parents own at least 1 business and they have been filing income taxes for her for the past few years yet she has never received an income from them, is that legal?

If not, is there anything she can do about it without getting herself into trouble legally or financially?

Asked on November 17, 2015 under Business Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, it is illegal. They are committing tax fraud by filing false returns. If she knows they have been doing this but has allowed them to do so, it is possible she could face liability as a conspirator or accomplice, depending on the exact facts--and if she has received any benefit at all (like getting credits for social security) while knowing she was not entitled to them, she may have committed a  form of theft. Your friend is advised to speak to an attorney who handles tax cases or litigation immediately.


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