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Tax Fraud - Coggle Diagram
Tax Fraud
Intentional actions that a taxpayer makes to defraud the government
Tax evasion
(Illegal)
Fraudulent actions that a taxpayer commits to avoid reporting or paying taxes
Tax avoidance
(
Legal)
legal means of lowering one’s tax bill through legitimate deductions.
Type
Willfulness
whether the party acted with criminal intent
Making false entries or alterations or creating false invoices or documents
Destroying books or records
Concealing assets
Keeping a double set of books
Covering up sources of income
Moving taxable assets beyond the government’s reach
Engaging in misleading or deceitful conduct
Good Faith Misunderstanding of the Law
A good faith or legitimate misunderstanding of the applicable law typically negates willfulness
Types of Tax evasion
Tax credit schemes
Consumption tax schemes
Falsifying tax deductions
Income and wealth tax evasion
Common Defenses to Tax Evasion Allegations
Avoidance, not evasion
Reliance on an attorney or accountant
No tax deficiency
Mental illness