Tax Evasion
In a world full of debt, the largest bill is the government's. To raise revenue and make their payments, they impose taxes on people in multiple ways. Although no one is ecstatic about paying taxes, it is not a choice. However, how you report your income and taxes is a choice. There are many ways to get out of paying taxes, some are legal and some are illegal. The legal ways, using the tax laws, to avoid taxes are called tax avoidance and the illegal ways are called tax evasion (Burns, Jones, Kulsrud, Oestreich, Pratt, Schnee, Thompson, Tripp, Tucker, Vogel 1160). Balter defines tax evasion as willfully paying less tax than known to be legally due (2.3). The focus of this paper is how the government determines if a situation is tax evasion, punishment for these crimes, the different types of tax evasion, the causes, the effects of them and possible ways to prevent these cases. The way the government determines if a case is, in fact, an evasion of taxes, is by following three basic elements set out in code section 7201. First, the tax must be due and owed for the year. Secondly, there must be proof that unlawful activity is involved. Finally, it must be the intent of the taxpayer to evade taxes (Balter 11.26).
Port Washington: Kennikat Press, 1971. Another contributing factor in tax evasion is the increased complexity of tax law over the years. Individuals find it difficult to comprehend the laws and their changes. This lack of understanding makes them feel like everyone is being treated differently and others are benefiting from it. Individuals begin to believe others have an unfair advantage over them. In turn, they tend to rationalize cutting corners to escape taxes. There are many different outlets that people use to evade taxes. They range anywhere from tax on interest income to tax on illegal income. There never has been a large quantity of income lost from tax on interest and dividend income, but for a short period of time, it was rising each year until the IRS started matching payer reports with the individual returns. Now, income lost on these items is very low, but there are still some types of interest that go unreported and the IRS has no paper trail to follow them. These items are interest on "bearer" securities and interest on informal loans between people (15). Oestreich, Nathan, Pratt, James W., Schnee, Edward J., Baltimore and London: The Johns Hopkins Press, 1970. Burns, Jane O., Jones, Sally M., Kulsrud, William N.,
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Approximate Word count = 3048
Approximate Pages = 12 (250 words per page double spaced)
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