tax evasion_what & why

8/3/2019 Tax Evasion_What & Why

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Tax Evasion: What and Why

Swapan Mukhopadhyay



Evasion

Evasion and Avoidance



Tax Evasion

tax evasion: efforts by individuals, firms,trusts and other entities to evade taxes byillegal means.

usually entails taxpayers deliberately

misrepresenting or concealing the truestate of their affairs to the tax authorities toreduce their tax liability, and

includes, in particular, dishonest tax

reporting (such as declaring less income,profits or gains than actually earned; oroverstating deductions).

http://en.wikipedia.org/wiki/Corporation

http://en.wikipedia.org/wiki/Trust_(property)

http://en.wikipedia.org/wiki/Tax


http://en.wikipedia.org/wiki/Trust_(property)

http://en.wikipedia.org/wiki/Corporation



Norms about tax evasion may influence the

individual’s decision whether to evade taxes or

not in two ways:

Most people feel the need to justify their actions to

themselves. The individual’s own norms about taxevasion will therefore affect his decisions whetherto evade taxes or not.

Most people are also influenced by what they

perceive to be socially acceptable behavior, atleast among people who are important to them.

Project: 2411 Tax Evasion in Norway



The essential problem involved in the measurement of tax evasion is that its illegality provides an incentive forindividuals to keep the activity hidden. Furthermore, byits very nature, tax evasion does not appear in any

official statistics. This implies that the extent of taxevasion cannot be measured directly but must be inferredfrom economic variables that can be observed.

DAN USHER

Queen's University, Kingston, Canada.



Tax Evasion or Tax Avoidance ? Before proceeding, it is worth making some distinctions.

Tax evasion is the failure to declare taxable activity…should be

distinguished from tax avoidance, which is the reorganization of economic activity, possibly at some cost, to lower tax payment.

Tax avoidance is legal, whereas tax evasion is not. In practice, thedistinction is not as clear-cut, since tax avoidance schemesfrequently need to be tested in court to clarify their legality.

The terms black, shadow, or hidden economy refer to all economicactivities for which payments are made but are not officiallydeclared. Under these headings would be included illegalactivities, such as the drug trade, and unmeasured activity, such asagricultural output by smallholders. Added to these would also be

the legal, but undeclared, income that constitutes tax evasion. Finally the unmeasured economy would be the shadow economy

plus activities such as do-it-yourself jobs that are economicallyvaluable but do not involve economic transaction.

DAN USHER

Queen's University, Kingston, Canada.



Different types of Tax Evaders or Tax Avoiders

Tax avoidance is the legal utilization of the tax regime to one'sown advantage, to reduce the amount of tax that is payable by

means that are within the law. By contrast tax evasion is thegeneral term for efforts to not pay taxes by illegal means. Theterm tax mitigation is a synonym for tax avoidance.

Tax protesters : Those attempting not to pay tax believing thatthey have discovered interpretations of the law that show that they

are not subject to being taxed. An unsuccessful tax protestor has been attempting openly to

evade tax, while a successful one avoids tax.

Tax resistance : declared refusal to pay a tax for conscientiousreasons (because the resister does not want to support thegovernment or some of its activities). Tax resisters typically donot take the position that the tax laws are themselves illegal or donot apply to them (as tax protesters do) and they are moreconcerned with not paying for particular government policies thatthey oppose.


http://en.wikipedia.org/wiki/Tax_resistance

http://en.wikipedia.org/wiki/Tax_resistance




Psychological Zones in human beings

ZONE X (something about you….neither you know yourself nor anyoneelse …. Quest of mankind to

explore this zone)

ZONE A(I know, you know)

(What everybody knows aboutyou including yourself)

ZONE C

(You know, but I do not)

(Something about yourself thatonly you know but no one

else)

ZONE B

(I know, but you do not)

(Something about yourself thatI know but you do not)



Psychological Zones in human beingsExamples on zones

ZONE X

(mental elevation, wisdom,awareness, fulfilment)

ZONE A

(I know, you know)

(What everybody knows about

you including yourself)

ZONE C

(You know, but I do not)(State of mind, internal responsetowards relationships, propensity

towards concealing crime)

Tax-related offences

ZONE B

(I know, but you do not)

(behavioral pattern, personaltraits, exhibit of emotions)



Scientific

Research

Infrastructure

Health Care

Education

Impact of

Tax Evasion

The Army

The Police



Where do I fit in the picture?

SOCIETYMe

EVADERS

I directly serve the society.

I reach benefits to the people,

and to the evaders too.

Enjoys

infrastructure

benefits

Do not pay taxes

Cheats the society



About me

10 years of progressive experience ininvestigating auditing of accounts

Experience gained in highly evasion-pronegeographical area

Led teams in countless raids, search and

seizure operations Encountered countless situations involving

high personal risk

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