BROWSE

Tax Cheat

What is 'Tax Cheat'

An individual (or group) who, through fraud, dishonesty or avoidance, does not pay the amount of tax that would be obligated if tax rules were properly followed. A tax cheat may improperly use tax shelters or purposefully miscategorize earnings and expenses under the pretense that the government will not miss the lost revenue because of the obligation's size relative to all taxes collected. Those found to be cheating on their taxes may be subject to fines, penalties or imprisonment.

Explaining 'Tax Cheat'

The Internal Revenue Service (IRS) allows taxpayers to report individuals and organizations that they suspect are tax cheats. As an incentive, it provides a potential reward if it is found that those being reported did, in fact, underpay taxes.


Further Reading


Cheating ourselves: The economics of tax evasion
www.aeaweb.org [PDF]
… The history of taxation is replete with episodes of evasion, often notable for their inventiveness … Another example of the link from a lack of deterrence to tax compliance involves state use taxes, which are due on sales purchased … These taxes are largely unenforceable (except …

Trust in public financeTrust in public finance
www.nber.org [PDF]
… The history of taxation is replete with episodes of evasion, often notable for their inventiveness … Another example of the link from a lack of deterrence to tax compliance involves state use taxes, which are due on sales purchased … These taxes are largely unenforceable (except …

The importance of faith: Tax morale and religiosityThe importance of faith: Tax morale and religiosity
www.sciencedirect.com [PDF]
… The history of taxation is replete with episodes of evasion, often notable for their inventiveness … Another example of the link from a lack of deterrence to tax compliance involves state use taxes, which are due on sales purchased … These taxes are largely unenforceable (except …

Estimating the determinants of tax moraleEstimating the determinants of tax morale
www.jstor.org [PDF]
… The history of taxation is replete with episodes of evasion, often notable for their inventiveness … Another example of the link from a lack of deterrence to tax compliance involves state use taxes, which are due on sales purchased … These taxes are largely unenforceable (except …

Do ethics matter? Tax compliance and moralityDo ethics matter? Tax compliance and morality
link.springer.com [PDF]
… The history of taxation is replete with episodes of evasion, often notable for their inventiveness … Another example of the link from a lack of deterrence to tax compliance involves state use taxes, which are due on sales purchased … These taxes are largely unenforceable (except …

Trust in government and welfare regimes: Attitudes to redistribution and financial cheating in the USA and NorwayTrust in government and welfare regimes: Attitudes to redistribution and financial cheating in the USA and Norway
ejpr.onlinelibrary.wiley.com [PDF]
… The history of taxation is replete with episodes of evasion, often notable for their inventiveness … Another example of the link from a lack of deterrence to tax compliance involves state use taxes, which are due on sales purchased … These taxes are largely unenforceable (except …



Q&A About Tax Cheat


How can you report someone as a potential tax cheat?

You can report suspected cheaters to the Internal Revenue Service (IRS).

Are there different types of taxes in the United States?

Yes, there are different types of taxes in the United States.

What is tax evasion?

Tax evasion is the illegal attempt of a taxpayer to evade assessment or payment of taxes imposed by federal law.

What does "federal law" mean?

Federal law means laws passed by Congress and signed into effect by the President.

Who may be considered a tax cheat?

An individual or group may be considered a tax cheat.

Who decides if an action is considered tax evasion or not?

The courts decide whether an action constitutes as tax evasion or not.

Are there any rewards for reporting suspected cheaters?

Yes, those who report suspected cheaters may receive rewards from the IRS.

What are some examples of fraudulent activity by individuals and groups?

Some examples include sheltering income, miscategorizing earnings and expenses, and claiming deductions for personal expenses.

What is a tax cheat?

A tax cheat is an individual or group that does not pay the amount of taxes that would be obligated if tax rules were properly followed.

Is tax evasion illegal?

Yes, tax evasion is illegal.