Posted in Finance, Accounting and Economics Terms, Total Reads: 268
Definition: Tax Fraud
Tax Fraud is a crime when individuals, corporations or trusts misrepresent or withhold the information while filing tax return in order to reduce the tax liability. Tax Fraud is also referred to as Tax Evasion. According to the economists, level of tax fraud is depended on the level of punishment by law.
Tax evasion of customs duty, VAT and sales tax, income tax, corporate tax, transaction tax is popular. One of the most common form of tax evasion is underreporting of income. Businesses and/or people who deal with large amount of cash either underreport the income or inflate the expenses to evade the taxes.
One of the example of tax evasion is that when someone is involved in smuggling of foreign products by illegal means in the country, he/she is able to evade whole customs duty. Tax Fraud is a crime in almost all the countries and the party charged of tax fraud is liable to fine and/or imprisonment.
Tax evasion is increased recently and it is one of the source of rising black money. Governments all over the countries are trying hard to stop tax evasion by enforcing laws.