What is ‘Tax Fraud’?
Tax fraud occurs when individual, business or company owners intentionally fabricates information regarding their tax returns in order to limit their tax amount liabilities. Tax fraud i
s basically involves misrepresentation or omission of data on tax return to avoid paying the entire tax obligation. Failure to comply on legal duties, falsifying or withholding information is against the law. Claiming false deductions, claiming personal expenses as business expenses and not reporting income are examples of tax fraud.
All working residents of every country are entitled to pay their taxes in owe to their government. Many comply and pay their taxes in their most honest way but there are still people who will try to cheat and commits tax fraud. There are certain tax law violations that can cause you big trouble and consequences. Claiming false- The idea of tax deductions is to decrease your taxable income, thus decreasing the amount of tax you owe to the federal government. If you give wrong information and regarding your claims to tax deduction you are liable for tax fraud.
Concealing and transferring assets or income- There are many ways on how to hide assets. One of which is using false names and Social Security numbers to file in the same or two or more states listing nearly identical assets and liabilities. And the most common types of assets that can be hidden are cash, bonds, mutual funds, cash value in insurance policies and variable annuities, stocks, traveler’s check, series EE saving bonds, and bearer municipal bonds. They can easily name their assets to other people or imaginary people just to cover up and withhold their taxes.
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