Definition Of Tax Fraud  

Money that is paid to the government by an individual or business is known as taxes. Paying tax is obligatory unless exempted by tax laws. If taxes are not paid in full or part, then it is called as tax fraud. One can do this by false book keeping, concealing the money earned or assets possessed.

Taxes are paid to one more entities such as county, state and federal government. The two major taxes are income tax and sales tax. Tax fraud can be committed in many ways. One can lie on the income earned and declare lesser earnings and lower the tax liability.

Some may claim exemption and credit where they are not entitled to claim and thereby indulge in tax evasion. Exemptions are the money that can be deducted from the taxable income legally. The credits are the amount the government doles to the deserved. Claiming exemptions or credits where they not applicable is a fraud because one does not pay what is due or gets refunds which one does not deserve.

The counties levy tax on personal properties. To lower the tax, one may try to under report or hide valuables in one’s possession or transfer them to others to evade taxes. Not necessarily the individuals or businesses have to be directly involved in fraudulent acts that constitute tax fraud.

The tax frauds may be both civil and criminal offences in nature. If it is civil, it may attract fines and penalties. Whereas, if it is criminal, it may lead to the payment of fines and end in jail sentence.

In the U.S., tax fraud is probed by the Internal Revenue Service. Anyone who suspects a tax fraud may report the case to the IRS using Form 3939-A. The IRS entertains anonymous reporting and also rewards anyone who gives a tip on a fraud.

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Definition Of Tax Fraud
 

How-To-Report-Possible-Tax-Fraud-To-Irs      There are always some people who break the law. Every year a small proportion of tax payers under report their earnings or possessions to lower the tax. Making a mistake in a tax return does not amount to tax fraud. An intentional act of avoiding paying tax what is due, reporting less income and not filing a return amount to tax frauds. More..

 


 

 

 
   
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