Tax Fraud
Introduction
This paper will discuss the topic of tax fraud. We will begin by introducing the basic concepts of tax fraud. Secondly, this paper will also delve into some of the laws that have been passed as punishment for those parties that decide to commit tax fraud. We will also highlight some of the more current examples of tax fraud that have been committed and the details that lead to the perpetrators being caught. Lastly we will discuss the role that criminal investigators have in the realm of tax fraud. Tax fraud can be stated simply as: willfully supplying fraudulent information on tax returns to the Internal Revenue Service (IRS). As we know, no one is perfect and mistakes are made quite often, but the operative word in this definition is ‘willfully’. If an individual knowingly and willfully lies on their tax returns, particularly stated income, then tax fraud has been committed. On page 567 of our text it states, “Tax fraud can be committed against any governmental or other organization that collects taxes, including the federal government, state governments, local governments, or other taxing authorities. The types of tax frauds committed against all of these organizations are similar.” With this being said, as long as there have been taxes, there have been those who find ways to avoid paying them. The most commonly misstated part of a tax return is the amount of income reported. Since taxes due are based on the amount of income reported, it is easy to see how not reporting certain amounts of income would lower the tax liability. Another way to avoid paying taxes is to improperly claim deductions that are authorized. Some basic examples would be the lawn-care professional “forgets” to claim $15,000 of part-time summer landscaping work or the individual who falsely claims $10,000 of charitable contributions. One thing to keep in mind is the difference between tax fraud, also known as tax evasion, and tax avoidance. As stated earlier,
This paper will discuss the topic of tax fraud. We will begin by introducing the basic concepts of tax fraud. Secondly, this paper will also delve into some of the laws that have been passed as punishment for those parties that decide to commit tax fraud. We will also highlight some of the more current examples of tax fraud that have been committed and the details that lead to the perpetrators being caught. Lastly we will discuss the role that criminal investigators have in the realm of tax fraud. Tax fraud can be stated simply as: willfully supplying fraudulent information on tax returns to the Internal Revenue Service (IRS). As we know, no one is perfect and mistakes are made quite often, but the operative word in this definition is ‘willfully’. If an individual knowingly and willfully lies on their tax returns, particularly stated income, then tax fraud has been committed. On page 567 of our text it states, “Tax fraud can be committed against any governmental or other organization that collects taxes, including the federal government, state governments, local governments, or other taxing authorities. The types of tax frauds committed against all of these organizations are similar.” With this being said, as long as there have been taxes, there have been those who find ways to avoid paying them. The most commonly misstated part of a tax return is the amount of income reported. Since taxes due are based on the amount of income reported, it is easy to see how not reporting certain amounts of income would lower the tax liability. Another way to avoid paying taxes is to improperly claim deductions that are authorized. Some basic examples would be the lawn-care professional “forgets” to claim $15,000 of part-time summer landscaping work or the individual who falsely claims $10,000 of charitable contributions. One thing to keep in mind is the difference between tax fraud, also known as tax evasion, and tax avoidance. As stated earlier,