Accidentally lied about spouse's income during deposition.

[Connor]

Jurisdiction

Tennessee

Going to try to keep this short as possible. Say hypothetically, you're being questioned during a deposition, for a case regarding your vehicle being hit by another car at a red light. But, this being one's first time in court, one becomes very nervous and flustered, and the lawyer of the opposing party asks if your spouse makes any income, and you accidentally say yes, when they do not, and you file jointly as such. Could this cause trouble with the IRS, and if so, what do I do to prevent this, and/or correct this mistake?

 

[adjusterjack]

Could this cause trouble with the IRS,

Probably not.

hat do I do to prevent this, and/or correct this mistake?

Advise your lawyer about your error and he will tell you what needs to be done.

 

[Tax Counsel]

Could this cause trouble with the IRS, and if so, what do I do to prevent this, and/or correct this mistake?

If the return was accurate you shouldn't have much to worry about. The only way the IRS is likely to even find out about your statement in the deposition is if someone who knows about it tells the IRS and/or provides the deposition transcript. Even then your reply of "yes" to the question of whether she makes any money isn't enough for the IRS to make an assessment of more tax. There's just not enough detail for the IRS to go on.

If what you are really worried about are possible criminal problems with the IRS over this, I'm pretty confident in saying that you'll never see an IRS special agent (the IRS version of an FBI agent) at your door to question you or arrest you unless there was a whole lot of tax games going on with your return that show an intent to evade tax or commit tax fraud. It's the burden of the IRS to assert what income you or your wife had that was not reported properly. A simple mistaken answer to a deposition is a long way from what the government would have to prove in a criminal case.

Just from what you've said here I see nothing more for you to do about this at this moment if the return was correct. If you get some kind of contact with the IRS (most likely by mail) about the return, that's when you need to get your records organized and explain to the IRS what happened. If you do get a letter from the IRS my bet it would be about something other than your deposition statement, like a 1099 match problem or something else totally unrelated. Since there is nothing to do about it now, don't let yourself get worked up over something that very likely will never happen.

The more likely problem from your statement is likely to be the insurance company or opposing lawyer wanting to dig for more information about the income she has if that is a source that they can attach if they win a judgment against your wife. That might result in having a bunch of correspondence and phone calls before the other side is satisfied your statement was in error. A hassle, sure, but probably nothing much more than that. If she has no income, there isn't much the other side can do about that.

 

[Zigner]

Just one point I'd like to make. In this context, you did not lie, as there was no intent to deceive. You misspoke, which is different than telling a lie. Your misstatement may have consequences, but you can cross that bridge when you come to it.

 

[adjusterjack]

Just one point I'd like to make. In this context, you did not lie, as there was no intent to deceive. You misspoke, which is different than telling a lie. Your misstatement may have consequences, but you can cross that bridge when you come to it.

Zig, you'd make a good politician.

 

[zddoodah]

Accidentally lied

There's no such thing. A lie is intentional. An accidental misstatement is not a lie.

Could this cause trouble with the IRS

Hypothetically, I suppose so. However, (1) the likelihood that the IRS would ever learn about deposition testimony in a state court personal injury case is virtually nonexistent, and (2) the deponent has an opportunity to correct misstatements when he/she reviews the transcript following the deposition.

 

[Tax Counsel]

There's no such thing. A lie is intentional. An accidental misstatement is not a lie.

Unfortunately those hearing the incorrect statement don't have any immediate way to know which it is and it seems to me that in our society today more people are pretty quick to assume an incorrect statement is a lie than was the case several decades ago. I've seen far too many personal and professional situations in the last decade where a big fuss was raised because someone immediately assumed the worst intentions that ultimately were shown to be nothing more than a mere misstatement.