Skip to main content
It looks like you're using Internet Explorer 11 or older. This website works best with modern browsers such as the latest versions of Chrome, Firefox, Safari, and Edge. If you continue with this browser, you may see unexpected results.

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