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| − | '''Tax Evasion''' is the act of [[illegally]] avoiding paying [[tax]]es, failing to report, or reporting inaccurately<ref>http://www.investorwords.com/4895/tax_evasion.html</ref>. There are many methods of committing tax evasion, all are punishable by law. Studies show that an estimated 30-40 percent of [[American]]’s cheat on their tax returns.<ref> “Tax cheats cost U.S. hundreds of billions” http://www.post-gazette.com/pg/07084/772106-28.stm</ref>. [[Money]] lost from these illegal actions has defrauded the [[United States government]] of $290 [[billion]] a year, according to the IRS. Advocates of a Fair Tax system use the loopholes in the current tax system as one of their main justifications for change<ref> “Tax cheats cost U.S. hundreds of billions” http://www.post-gazette.com/pg/07084/772106-28.stm</ref>."
| + | #REDIRECT [[Tax evasion]] |
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| − | ==Penalties==
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| − | The United States Tax policy enforcement comes from the [[Internal Revenue Service]], which works with [[United States Tax Division]] attorneys. Together this group helps in the making of tax administration policy's, handling of civil trials and appellate [[litigation]] in [[federal]] and [[state]] courts, and pursuing federal [[grand jury]] investigations<ref>http://www.usdoj.gov/tax/</ref>. The Internal Revenue Service (IRS) can prosecutes any person or entity that avoids payment of taxes due, and can assess penalties.
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| − | {| class="wikitable"
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| − | ! Crime
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| − | ! Penalty
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| − | | '''Failure-to-file'''
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| − | | The penalty is 5% of the tax not paid by the due date for each month or part of a month that the return is late. Penalty can not exceed more then 25% of your original tax amount. If reasonably cause for not filling tax is found, then no penalty will be placed. This penalty also offers a discount to offenders that file pay penalty within 60 days. If deemed necessary, [[criminal]] [[prosecution]] for failure to pay income tax may be used, <http://www.taxdeal.com/tax_penalties.html> a maximum prison sentence of one year placed.
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| − | | '''Tax Penalty for frivolous return'''
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| − | | Offender may have to pay $500 if a tax return is filed that does not include enough information to figure the correct tax or shows an incorrect tax amount due to. In some cases other penalties may also be initiated.<ref>http://www.taxdeal.com/tax_penalties.htm<ref> The government does not have to prove intent of the offender to commit evade tax. This is a felony and can result in a prison sentence of up to three years and/or fines up to $100,000.<ref>http://ezinearticles.com/?Tax-Evasion-Penalties&id=179227</ref>
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| − | | '''General Tax evasion'''
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| − | |This is a [[felony]] and if a [[citizen]] is convicted, he can carry a [[prison]] sentence of up to five [[year]]s and/or fines up to $100,000.Although the evasion may have been carried out by accountants and business managers, the citizen is held responsible for his tax return.<ref>http://ezinearticles.com/?Tax-Evasion-Penalties&id=179227</ref>
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| − | ==Motivation==
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| − | Experts state the there are two main motivations for citizens to commit tax evasion. The first motivation is ease in committed the crime. In the [[United States]] less than 1 percent of returns are audited, which gives the incentive for people to try to beat the system. Joe Antenucci, [[professor]] of [[accounting]] and [[finance]] at [[Youngstown State University]], stated, "Any gambler will tell you, when you have a high payoff and low risks, that is when you want to be involved". The second motivation is governments wasteful spending of taxes, citizens see a justification in not paying their tax's if their government does not wisely spend thier tax money.<ref> “Tax cheats cost U.S. hundreds of billions” http://www.post-gazette.com/pg/07084/772106-28.stm</ref>
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