Corporate Tax Evasion
A growing trend in our society today is corporate tax evasion. It has become increasing more common for corporations to pay no or little income tax, and in some cases actually receive money back from the government. It is illegal and therefore deviant by that definition. Corporate tax evasion (using borderline legal means) is widespread. White-collar crime is a term that is usually applied to crimes associated with business that do not involve violence or bodily injury to another person. Corporate tax evasion falls into the category of white collar crime.
There are 3 types of corporate income taxes as follows: National 30% of taxable income, Local 20.7% of National Tax, and Enterprise 10.08% of taxable income. The calculated effective tax rate of 42.05% although they simply add up to 46.29% (30.0% + 30.0%X20.7% + 10.08%). It is because Enterprise tax is deductible for the other tax purposes only when it becomes due. Tax evasion involves fraudulent or criminal behavior, conduct involving deception, concealment, or destruction of records. Tax evasion occurs when the taxpayer fraudulently or criminally avoids the payment of taxes otherwise due and owing under the tax laws. There are many tax crimes under the Internal Revenue Code. The criminal violations cover the same territory as the civil fraud penalties, although the government has a higher burden of proof in the criminal cases. The criminal cases, however, reach a far greater spectrum of potential defendants. Unlike the civil penalties which target only the taxpayer, the criminal penalties reach anyone engaging in the defined offense, including employees, accountants, lawyers and tax preparers. Under IRC Sec. 7206(2), a person is guil...
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...t deviance is a learned behavior like all other social behavior. When there is an excess of definitions favorable to deviance or law violation deviance (or in our case, corporate tax evasion) occurs. Differential Association states that criminal behavior is learned in interaction with other persons in a process of communication and that the principal part of the learning of criminal behavior occurs within intimate personal groups. Undoubtedly there can be a connection drawn from the intimate settings where the decisions to commit tax evasion are made and the above state definition. When a people are in small group setting the person inevitably assimilates into the surrounding culture, in this case tax evasion.
Bibliography:
Construction of Deviance; page 75, Edwin H. Sutherland
http://www.ustreas.gov/press/releases/ps421.htm
http://www.taxhound.com/
Differential Association Theory The film “Blow” covers many different topics of differential association theories. The attitudes, the values, and the motives for criminal behavior as learned behavior. The film Blow, goes into the start of a young kid name George Jung, his parents want him to have values and live a wonderful life for himself. George is raised with father owning his own business, a stay home mother.
Last week, we talked about the IRS Criminal Investigation unit, which just released their Fiscal 2012 report. That report was filled with the sort of dry statistics you would expect from an IRS annual report: 5,125 total investigations launched, 202 crooked tax preparers indicted, 199 identity thieves sent to prison, and 64 months average time behind bars for money launderers. But the report also includes dozens of stories of tax cheats who really just should have known better — and some whose stories are so entertaining we just had to share them. Are you having a bad day? Well, be glad you're not one of these people!
Differential association theory was founded by Edwin H. Sutherland (Lilly, 2012, p. 43). This theory states that “any person will inevitably come into contact with definitions favorable to violation of the law and with definitions unfavorable to violation of the law” (Lilly, 2012, p. 44). Whichever definition is more prominent in a person’s mind, will lead to their decision of “whether the person embraces crime as an acceptable way of life” (Lilly, 2012, p. 44). Sutherland composed nine propositions that explained the theory. He explained that “crime is learned through the process of differential association” (Lilly, 2012, p. 45). The nine propositions explained that “criminal behavior is learned” (Lilly, 2012, p. 45). He explained that by communicating with others, especially those that are close to them they are more likely to pick up behaviors from those people. Differential association theory also explains that learning criminal behaviors “involves all the mechanisms that are involved in any other learning” (Lilly, 2012, p. 45). While learning a criminal behavior one not only learns “the techniques of committing the crime” but also the “specific direction of motives, drives, rationalizations, and attitudes” involved with crime (Lilly, 2012, p. 45). This is theory is shown throughout the book when the young Mr. Moore was influenced by the life of crime that was present in his
Just like people, corporations have the capability of committing criminal acts. The Enron scandal in 2001; the Bernard Madoff ponzi-scheme of 2008-2009; both of these examples show that despite internal and external controls, regulations, and oversight, corporations still are a multi-faceted entity that have the propensity to partake in crime. That being true, that criminal entity must be punished and held responsible for their actions. One tool in the prosecutorial tool belt is the use of deferred prosecution and non-prosecution agreements. According to Lanny Breuer, the United States Department of Justice’s Criminal Division, “over the last decade, deferred prosecution agreements have become a mainstay of white collar criminal law enforcement” (Warin, 2012).
Akers (2000) states that, “The principle of differential Association is that a person commits criminal acts because he or she has learned “Definitions” (rationalizations and attitudes) favorable to violation of law in “excess” of the definitions unfavorable to violation of law” (p. 73). The key notion of Akers’ theory is that individuals who commit crime, do so because they have educated themselves on various types of behaviors and attitudes that dwell on law-breaking. This also happens to be one of the perceptions included in Sutherland’s Differential Association
White collar crime is a term created by Edwin Sutherland in 1939 that refers to crimes committed by people of higher social status, companies, and the government according to the book “White-Collar Crime in a Nutshell” by Ellen Podgor and Jerold Israel. White collar crimes are usually non-violent crimes committed in order to have a financial-gain (Podgor and Israel 3). A very well known white collar crime that has even been taught in many history classes is the Watergate scandal. This is a white collar crime that was committed by government authorities. Watergate was a crime that shocked the nation.
Organisational illegalities or rather corporate crimes on the other hand, are individual or collective illegalities that are perceived as helping to achieve the organisational goals set by the dominant coalition within an organisation. Kramer (1984: 18) in Gary and Slapper (p.16) describes the concept of corporate crime: By the concept of corporate crime, then we wish to focus attention on criminal acts (of omission or commission) which are the result of deliberate decision making (or culpable negligence) of those who occupy structural positions within the organisation as corporate executives or managers. These decisions are organisationally based – made in accordance with the normative goals (primarily corporate ... ... middle of paper ... ... ealt appropriate justice and indicates that corporate crimes and the people involved in them are the most violent parasitical, and dangerous of all criminals.
In this paper, I am going to going to examine the criminological theory of Differential Association theory by Edwin H. Sutherland. Also I am going to examine Kirk White from the film The Wild and Wonderful World of the Whites of West Virginia. Furthermore, I am going to apply Edwin H. Sutherland’s Differential Association theory to explain and understand the deviant actions of this character. I conclude that Differential association theory will explain why this character act in a deviant why.
Why does white collar and corporate crime tend to go undetected, or if detected not prosecuted? White collar and corporate crimes are crimes that many people do not associate with criminal activity. Yet the cost to the country due to corporate and white collar crime far exceeds that of “street” crime and benefit fraud. White collar and corporate crimes refer to crimes that take place within a business or institution and include everything from tax fraud to health and safety breaches. Corporate crime is extremely difficult to detect for many reasons.
It was found during research that white collar crime does not necessarily require a breach of law, as various forms of white collar crime can be committed without them being held criminally responsible, all due to the fact that they were conducted without criminal intent. This means that civil law is more effective in regulating white collar crime, as mens rea does not need to be proven unlike criminal law. Therefore, the definition for white collar crime should be defined as nonviolent forms of crime that is financially motivated and committed by businesses and governments, with or without mens
White collar crime can be a very complicated topic because of how fairly new it is. Edwin H. Sutherland helped coin the term white collar crime in December 1939, during his presidential address “The White Collar Criminal” (Friedrichs, 2010). Although white collar crimes had been happening throughout most of history, they didn’t get as much attention until more recently. Since white collar crime is still so new, all definitions have been under a lot of scrutiny. The definition that is currently most acknowledged comes from a group of criminologists that got together in a group, to come up with a definition for white collar crime and that would be accepted by the majority. This group defines white collar crimes as:
His main contention being that the very permissive attitudes within society allow for this type of crime to continue to flourish without consequence; but, research has shown that Americans do in fact condemn white collar crime. There has been a lot issues with the true definition of what white collar crime is. The most common white-collar crimes include fraud, bribery, Ponzi schemes, cybercrime, copyright infringement, money laundering, identity theft and forgery insider trading, labor racketeering, embezzlement. Although Sutherland defined it first, the FBI defines it with a more narrow approach: "those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence" (1989, 3). The crimes committed which fall under the title of white collar crime are entirely dependent upon the identity of the offender; their occupation, their environment, and their opportunities are significant factors in relation to their
Differential associations vary in frequency, duration, priority, and intensity. Referring to the contact an individual must have with proponents of criminal behavior; this principle suggests that there is a varying, but direct, relationship that affects how often, for what length of time, how important, and how intense deviant behavior
The law that applies to the crime of evading taxes in the United States of America is under section 7201 called Attempt to defeat or avoid tax. It states that “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall. In addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than five years, or both, together with the costs of prosecution.” The violation of this law is evident where Erik Fresen who served in the Florida House of Representatives evaded to pay tax for eight years while in power and accepted the same mistake of voluntarily violating the legal duty.
Social learning theory argues that individual behavior is shaped through the process of reinforcement and punishment. It argues crime is largely detrmined during childhood as a result to incompetent parenting, and tends to persist thereafter.. Differential reinforcement is defined as the balance of anticipated or actual rewards and punishments that follow or are consequences of behaviors. Social learning theory focuses on four principles: Differential association, differential reinforcement, imitation and definitions. The debt of differential association theory can be seen in these for principal said to affect the individual's probability of committing law violations.