State Theft: Are You a Tax Evader? Here are the Legal Implications

Spain’s La Liga football league prides itself for assembling the worlds’ most expensive talented trio. Ronaldo, Barcelona’s Messi and Neymar combined are worth a fortune.

But their careers in Spain have made regular scoops for the media to feast on. The three have been dragged to courts over accusations involving tax fraud and other financial crimes by the Spanish courts.

In 2016, Messi and his father were convicted of defrauding by the Spanish sate in $4.6 million unpaid taxes routed to offshore accounts. The duo was handed a 21-month jail sentence. Manchester United manager Jose Mourinho will also have his day in court, facing related charges.

Derick Matsengarwodzi
But what really is tax fraud? And who is capable of committing such crimes, where and when? Simply put: you and me. In order to appreciate tax fraud, feel free to read on to avoid such crimes in future.
Tax Fraud is a Serious Crime

Tax fraud is when individuals or business knowingly and intentionally falsifies information on tax return in a bid to limit their tax obligation. Common examples include claiming false deductions, claiming personal expense as business expenses, and failing to report income.

Under United States law, it is a legal duty for every taxpayer to voluntarily file a tax return, and to submit the correct amount of income, employment and taxes. Forging, withholding information or failure to comply constitutes tax fraud.

How one commits tax fraud?
Deliberately fails to file an income tax return. Failing to pay tax dues intentionally; purposefully not reporting all income received; fraudulent or false claims; preparing and filing a fabricated return.

Evasion of customs
Leaks on boarder entry points in most developing countries are depriving governments of revenue. Importers evade duty by under-invoicing, reducing quantity and products when declaring.

The import, export of foreign products or contraband using illegal means constitutes smuggling. Such goods don’t pay custom duty and taxes, but rather profit players involved.

Common signs of fraud
Overstatement of deductions and exemptions; documents falsification; concealing of income earned; possessing two separate ledgers and using false Social Security number.

Implications of tax fraud
While committing tax fraud, one is cheating the government of revenue. Tax evasion is illegal and punishable by fines, penalties, interest, and/or jail time, depending on the case. But how big is tax evasion? The U.S, Brazil, Italy, Russia and Germany lose in excess of 1 billion in tax fraud. 


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