Is it tax fraud to draw unemployment while still working? 5 Answers as of January 10, 2011

It appears to be fraud and you may have to pay back the unemployment benefits your received to your State employment agency. You could also be prosecuted criminally.

It is fraud and in addition to tax issues you could face criminal penalties. Stop the activity immediately.

It may be fraud (and, therefore, a crime) on the government that is paying you. But if you pay tax on the income it should not be tax fraud.

Generally, failure to report income can be determined to be tax fraud but I believe your primary concern is whether or not your actions would be considered unemployment fraud. In Ohio, you could be subject to re-payment of benefits, penalties, fines and/or imprisonment for fraud. You may want to discuss your situation in further detail with an attorney "off-line" so that all of your discussions will remain confidential.

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As long as you report all of your income it is NOT TAX (IRS) FRAUD. However another government agency may consider it fraud.