There is vigilance in banking and in other forms of transactions to record transaction information of an US taxpayer. The government employs methods and employees that cost billions of dollars every year. Even then there are tax evaders who outsmart mechanical and human intelligence.
Tax payers are responsible for correctly stating their tax amount and paying them on time, unless the time is extended by IRS itself. Evaders have some common techniques for evading taxes:
- Claiming more deductions than applicable in reality
- Under reporting or omitting income to reduce the amount of payable tax
- Using 2 book keeping methods to keep track of income and expense
- Hiding income in bank accounts of foreign nations
- Using fake social security number
- Refusing to offer a reason why tax filing was late
- Yield burning
- Transacting in certain tax exempt bonds
- Overstating dependents to reduce tax payment
- Structuring of financial instrument in a manner such that the profits automatically moves to a foreign nation with low tax burden
Failure to file tax returns on time is met with a standard penalty of 5% on the amount taxable. If the IRS considers your action fraudulent, penalties can rise as high as 75%. In case, your dubious actions have been detected, waste no time in consulting an IRS Fraud Lawyer.