What is tax fraud, and how does our government control it? That's a really
big question to answer, so let's break it apart and answer it in two different
paragraphs. Tax fraud is the intentional avoidance of tax due by a taxpayer,
corporation, or other legal entity.
There is a vast difference between the opportunity to minimize your tax
liability and the direct avoidance of any responsibility. The tax laws and
regulations of the Internal Revenue Service are there for the benefit of the
taxpayer. If there is a way to reduce or minimize the amount of tax due,
legally, by all means citizens are encouraged to take the break. There are all
sorts of ways to commit tax fraud, and many famous cases have been tried, such
as Al Capone and Willy Nelson.
When, as a taxpayer, you seek whatever legal means possible to avoid tax
liability, you are guilty of no crime. It is your given right to seek a means to
minimize your liability, in order to keep more of your money. However, when
companies, individuals, or any other legal entities attempt to avoid their legal
responsibility, we as a country suffer.
The government operates on tax dollars. Tax dollars that everyone who has
been deemed liable must provide, and if not provided, penalizes everyone.
Tax fraud has been a part of society for as long as there have been
societies. Even during Roman rule, there were tax collectors, and individuals
who evaded their payment of taxes.
This country was founded on the precept that England charged an unfair tax on
tea (and other various assorted sundry) to the point that the colonists were
unfairly taxed, without a voice in the government. The Internal Revenue Service
is charged with overseeing the regulation and prosecution of any person or
entity that avoids payment of taxes due, and can assess penalties for those who
succeed.
What tools does the Internal Revenue Service (IRS) use to control tax fraud?
There are actually several means by which the IRS can control tax fraud, once
they discover the crime has been committed. How do they detect tax fraud?
The IRS has some 2800 special agents that are trained to gather information
that is used to detect tax fraud; they have unlimited access to tax returns, the
power to issue summons regarding needed financial information, and the right to
seize or freeze monies in the attempt to collect the necessary financial
information.
Once the tax fraud has been detected, the Internal Revenue Service can levy
tax liens, seize assets, freeze money in checking and savings accounts, and
garnish wages. Any and all properties held by the individual taxpayer can be
seized, and sold at auction if no attempt is made to repay the liability.
Everyone that is determined to be involved in an evasive or fraudulent act of
tax liability has the opportunity to be heard, to meet with the Internal Revenue
Service, and receive a trial to determine if the accused party is guilty. It is
generally in the individual's best interest to settle with the Internal Revenue
Service if there is any possible doubt as to their innocence.
That's not to say that the Internal Revenue Service has always played fairly,
or that they are free from mistakes. This is not so. There have been many
instances of improper intelligence access, and errors on the part of the
Internal Revenue.
But, in the majority of cases, the tax fraud accusation was legitimate, and
the individual charged was guilty. Many individual taxpayers rely on accountants
and business managers to handle their financial affairs; in fact, many are not
even aware of the status of their finances.
It is however, ultimately, the individual taxpayer's responsibility to be
held accountable for the information provided to the Internal Revenue Service.
So, if you're going to be the one in front of the Internal Revenue, you should
do yourself a favor and examine your return, understand what you're reading, and
check the return for accuracy.
