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ILS2325 Economics of Sin: Personal Cheating

Tax Fraud

The IRS defines tax fraud as "an intentional wrongdoing, on the part of a taxpayer, with the specific purpose of evading a tax known or believed to be owing."

Source: irs.gov

 

Income Taxes

Corporate Tax Evasion

Costs and Benefits of Tax Fraud

Costs:

> Paying auditors and attorney fees

> Possible jail sentence

> Paying back taxes

 

Benefits:

> The government eventually gets the money owed to them,

    via wage garnishment, payback plan, etc.

> Punishment discourages future tax evasion

 

Sources:

irs.gov (Criminal Investigation)

irs.gov (Negligence vs Tax Fraud; Penalties)

Unpaid Taxes