What is the liability if a car sales price is intentionally under reported?

UPDATED: Oct 16, 2011

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What is the liability if a car sales price is intentionally under reported?

I sold a used car. The buyer wanted me to “gift” the car to him but I refused. However, I did honor his request to make the bill of sale price lower than the actual purchase price. Is there a perjury concern for us the seller, regarding the lower price? Or is that on the buyer to report accurately what they paid? I believe there was some language on the “pink slip” but cannot remember if that liability was for the buyer, seller or both of us. Can there be a charge of perjury for lying on the
DMV form?

Asked on October 16, 2011 under General Practice, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

1) Whomever filled out the paperwork is the one who could face liability for lying on it.

2) In addition, you will have committed tax fraud if you do not report--and pay taxes on--all of the income.

Obviously, the above are only issues if the true price and state of affairs comes to light. However, if they do come up in any way, you have committed acts that could result in criminal prosecution as well as civil liability--i.e. you could pay fines, possible face jail time (though as a practical matter, most likely not in a situation like this), and also be liable for whatever taxes and other fees you did not properly pay. You have more liability than the buyer, in that the potential income tax liability falls on you, not on him.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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