You may have heard it countless times already, but do you really know and understand what tax revenue fraud actually means? Tax fraud in general is quite broad so it may be helpful to break it down to manageable chunks. If an individual, company or a legal entity intentionally avoids paying tax due them by law, he is committing tax fraud. This is different from merely trying to minimize your tax liabilities. That is why there are laws and regulations provided by the Internal Revenue Service. There is nothing wrong with wanting to minimize or reduce the tax amount due if there are legal means to do so. However, there are still people and organizations who are trying every trick in the book to get away with paying the right amount of taxes.
Tax revenue fraud does not mean seeking every legal means possible to reduce tax liability. Every individual in his right mind will want to keep the majority of his hard-earned money and given the legal opportunity will definitely grab it. Nevertheless, when these individuals or companies try to maneuver things illegally, the whole nation suffers. The national government cannot operate without dollar taxes. Therefore, everyone who is legally liable must submit to the given policy or be penalized otherwise.
Tax revenue fraud has been in existence since time immemorial, way back two thousand years ago during the Roman Empire and probably even earlier. So many individuals have tried every possible means to avoid paying their taxes. That is why the IRS exists so that there will be a legal entity to regulate and prosecute any entity or individual that violates tax laws and do not pay the taxes due them. They are liable for giving penalties to those who commit such offenses.
So exactly what does the Internal Revenue System use to control such fraudulent activities? The IRS has the right to do a couple of things once they discover commission of the offense. There are so many ways for them to detect tax fraud. With almost three thousand special agents highly trained in information gathering to detect tax fraud, there’s practically no way of escaping it. They have access to all your tax returns, are capable of issuing summons to get the required financial information and can even freeze or seize monies if that is the only way to gather the necessary information about your finances.
The moment fraud has been detected, the IRS can then levy tax liens, freeze money in savings, and checking accounts seize assets and even garnish your wages. If no effort is made to repay his liability, the IRS is now entitled to seize all properties held by the individual and sold to auction as payment. However, anyone who is charged with such fraudulent activities still has the right to be heard, to seek an audience with the IRS, and receive a fair trial to prove his innocence. These individuals are often advised to simply settle amicably with the Internal Revenue Service if they are indeed guilty of such crimes.
Nobody is saying that the Internal Revenue Service is perfect and not once has it committed any mistakes. In fact, there have been numerous times when errors and inaccurate intelligence information were committed. In general, the accusations about these fraudulent activities were valid and have legal basis and the individual or entity charged was guilty. A lot of individual taxpayers and corporations relay on their business managers and accountants to handle these matters for them. In certain cases, these people are not even aware exactly how much money they have. However, it is your personal responsibility to ensure that all the necessary information handed out to the Internal Revenue Service are accurate. That is why it is very helpful if you can be the one to personally file your income tax return every once in a while just so you’ll have a fairly good idea how the actual process goes.