Saturday, September 30, 2023

Can someone go to prison for keeping inadequate accounting records?

Inaccuracies or omission of required information in accounting records may result in fines and fines from tax authorities.

In Mexico, improper keeping of accounting records is generally not a crime that in itself is punishable by a prison sentence. However, when inadequate accounting records are linked to fraudulent activities, tax evasion, money laundering or other illegal financial activities, the individuals involved face more serious legal consequences, including imprisonment.

The responsibility for maintaining adequate accounting records lies with taxpayers and companies, and lack of accuracy or omission of required information in accounting records generally results in fines and penalties from Mexican tax authorities, such as: B. the Administrative Service. Tax (SAT). These penalties can be significant and include payment of unreported taxes and fines.

Jail for improper accounting

In this context, Office of the Attorney General points out that there is a legal regulation that is questionable.

From the text it appears that Article 111 of the Federal Tax Code (CFF) states that:

Anyone who:

VIII. He enters accounting, tax or social processes or transactions with incorrect or insufficient information or has incorrect documentation for these entries.

In his text Office of the Attorney General He explained that this provision is widely questioned because it is not clear that someone can go to prison for inadequate accounting.

The Authority’s most recent statement in this regard was made at the June 2019 Tax Trustees meeting when this approach was presented to the SAT and asked the following questions:

  • Will an accountant be punished with a prison sentence of three months to three years if he makes incorrect accounting records for some accounting, tax or social operations or transactions, even if no taxes are omitted?
  • Does he also face a prison sentence of three months to three years if he prepares the accounting using false information or documents, even if he does not know that the documents are false?

However, it appears from the text that the SAT, for its part, has refrained from responding on the grounds that it does not have jurisdiction in criminal matters:

According to Article 21, second paragraph, of the Political Constitution of the United Mexican States, the decision whether or not to take criminal action rests with the Public Ministry; and the imposition of punishments for the commission of crimes is the responsibility of judges, which is why the supervisory authority refrains from making a decision on the above-mentioned issues due to the lack of jurisdiction in criminal cases.

Therefore, Office of the Attorney General considers that the scope of this provision remains subjective and the cases of omission remain broad and undefined.

Nation World News Desk
Nation World News Desk
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