ASK MICKEY, CPA, CVA
QUESTION:
I know tax fraud is everywhere, what are the worst offensives?
ANSWER:
Tax fraud is a deliberate act of falsifying information on a tax return to avoid paying the correct amount of taxes owed. It encompasses a variety of illegal activities, including:
- Underreporting Income: Not declaring all income received during the year.
- Inflating Deductions or Expenses: Claiming more deductions or business expenses than actually incurred.
- Falsifying Documents: Creating or altering documents to mislead tax authorities.
- Hiding Assets: Concealing assets or income, often in offshore accounts, to evade taxes.
- Claiming False Dependents: Listing people who are not legitimate dependents to receive tax benefits.ASK MICKEY, CPA Tax Tips for Tax Year 2024
- Failure to File Returns: Not filing tax returns when legally obligated to do so.
Tax fraud is a serious offense and can lead to significant penalties, including fines, interest on unpaid taxes, and imprisonment. It undermines the integrity of the tax system and places a greater burden on honest taxpayers. Tax authorities, like the IRS in the United States, have various tools and methods to detect and investigate tax fraud, including audits, informant tips, and data analytics.
