Web Lawyer: The Internet Puffery Mistake

By September 1, 2010Website Lawyer

Web lawyer tax fraudThere’s a woman who lives near me who will be going to federal prison soon for up to 3 years. She pled guilty in order to avoid spending more time in the pokey. As a Web lawyer, I didn’t represent her.

Her mistake?

Lying to the government about how much money she earned.

In addition to the Federal Trade Commission, Internet entrepreneurs have to worry about dealing with the IRS when making false earnings claims. Your Web lawyer can explain specific dangers and details but here’s a general overview.

For example, if you tell your clients on your website that they will earn X using your product based upon your experience, those earnings numbers better be real. Puffing them up to make the product look more effective simply gives the tax collectors something to point to as evidence of what you are earning using the product yourself.

If you say, “Earn $XXXXX in 30 Days,” it will be reasonable for the IRS to assume you are actually earning that yourself. Guess who has the burden of proving that is not true if you get a tax audit and are asked about it?

It’s hard to have any credibility on this issue when the defense is you lied to make extra sales. Admitting Internet fraud to avoid tax fraud prosecution is not an attractive option. If you’ve committed Internet fraud, you may need a criminal defense lawyer in addition to a Web lawyer.

When in doubt, under-promise, over-deliver, and have your clients be thrilled because of it.

To your online success!

-Mike the Web lawyer

P.S. One of the most effective ways to communicate credibly with your clients is using a reputable autoresponder service like aWeber. I’ve been using their services for years and highly recommend the company.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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