Corporate Tax Evasion

688 Words2 Pages

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/

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