“Liar, liar, pants on fire!” is more than just a schoolyard taunt. When it comes to your finances, lying could burn you in just about every area of your life. So stop taking cues from our friend Pinocchio here and start telling the truth. Here are five financial lies that will really get you in trouble.
Lying to the IRS. Lying on your taxes is a felony that could result in jail time of up to three years.Individuals face fines of up to $250,000 and corporations face up to $500,000. In addition, you could be slapped with the costs related to your prosecution. Uncle Sam says don’t do it. Trust us, he’ll get you.
Lying to your lender. Submitting false statements on a mortgage application is illegal. Under the Fraud Enforcement and Recovery Act, if you’re convicted of mortgage fraud, you could face up to 30 years in prison and a fine of up to $1 million. If prison stripes aren’t your style, triple check to make sure all of your statements are factual.
Lying to your bank. If you were in a situation where money posted to your account in error and you kept it, you might be in for big trouble. In most cases, keeping the money could mean jail time. Contact your bank immediately and report the error. Face it, there’s no such thing as free money.
Lying to your spouse. Financial infidelity is one of the top reasons for divorce. Aim for full disclosure and work on building financial intimacy. Don’t lie about purchases, the amount of debt you have, or keep any other financial secrets. A messy divorce is much more expensive than telling the truth.