Tax evasion is the illegal practice of not reporting or underreporting income or assets to avoid paying taxes that are legally owed to the government.
Tax evasion is a deliberate act of noncompliance with tax laws, and it involves hiding or misrepresenting information in order to reduce the amount of tax liability owed.
Governments use various tools to detect tax evasion. They have access to information from financial institutions and other sources that can help them identify potential cases of tax evasion.
Examples of tax evasion include failing to report income earned from a side job, not declaring all sources of income, falsifying records or deductions & hiding assets in offshore accounts.
Tax evaders may be subject to fines of up to $250,000 for individuals and $500,000 for corporations, as well as up to five years in prison, in addition to paying the taxes owed plus interest.
Punishments for tax evasion vary depending on the severity and extent of the offense, as well as the jurisdiction in which it occurs. Tax evasion can result in fines, imprisonment, or both.