Why Tax Evasion Is A Criminal Offense

Tax evasion is generally regarded as an act in which a person chooses to do so, no taxes. This action can not be paying taxes to report, simply choose not to file an income tax or choose to have no information on the taxable profits of the return statement. In all cases, be regarded as tax fraud, and often leads to severe penalties. Illegally avoid paying taxes, do not report or inaccurate reporting are good examples of tax evasion. The federal government imposes strict and serious penalties for tax evasion. Tax evasion is different from tax avoidance, which is actually legitimate methods of reducing the tax burden.

Tax evasion is a crime in most of the civilized world, and subjects those responsible for fines and imprisonment - in China, the death penalty as strong as the death penalty can be. In Switzerland, many of which are in addition to criminal tax evasion in other countries are considered as civil affairs. Even dishonest return false income tax is not necessarily considered a crime. These issues will be discussed in the Federal Tax Administration of the courts, not criminal courts. However, in Switzerland, a number of criminal tax evasion, is envisaged as a falsification of the data.

In the U.S., tax evasion is actually a crime that can result in huge fines, imprisonment or both. Section 7201 of the Internal Revenue Code says: "Those who deliberately tried to prevent by any means, or to avoid the tax provided by this title, or even their benefits, and other charges and the penalties provided by law, the responsibility for crime, and after sentence may not exceed $ 100,000 ($ 500,000 when it comes to us) or is in prison not exceeding five years or, as is liable to the costs of prosecution. "smoking gun first requires to show that responsibility for unpaid taxes there. Second, the allegations must show take some positive actions of the accused or try to evade taxes. Third, the prosecution must prove that the defendant had the specific intent to prevent, to pay a certain liability. On conviction, the court determined that the defendant is responsible for each of these elements to find beyond a reasonable doubt.

As for banks, tax evasion, therefore, the information asymmetry between lenders and borrowers is reduced and ultimately increase access and increase financing costs for companies. But this may be a compensatory effect of the load. In countries with efficient financial institutions, the collateral is not as important for the lender because the information gap between borrowers and lenders and smaller lenders can track the company more efficient. Debtors as motivation to ensure full transparency in accounting.

Evasion and tax avoidance threatens revenue. U.S. Senate commends the lack of funds, tax evasion by U.S. companies and individuals at about $ 100 billion a year. In many other countries, the amount of the face of a lot of euros. This means fewer resources, infrastructure and services such as education and health, lower living standards in developed and developing countries.