Criminal Investigations of Taxpayer Fraud

2006 ◽  
Vol 4 (1) ◽  
pp. 44-58 ◽  
Author(s):  
Nancy B. Nichols ◽  
Robert C. Richardson
Keyword(s):  
Small Businesses ◽  
Tax Compliance ◽  
The United States ◽  
Internal Revenue Service ◽  
Criminal Investigation ◽  
Criminal Prosecution ◽  
Tax System ◽  
Voluntary Compliance ◽  
Cash Economy

Under the voluntary tax system in the United States, taxpayers are responsible for fully and accurately reporting and paying the amount of taxes owed. Voluntary tax compliance is reinforced through various programs including the document matching program, Internal Revenue Service (IRS) civil audits, and criminal prosecution. The Criminal Investigation (CI) division of the IRS is responsible for enforcing the criminal statutes. This article investigates the role of CI in tax compliance and analyzes the results of 598 published tax crime cases from 2000 through 2004. The results indicate that CI must increase its focus on cash economy small businesses. Additional recommendations include the expansion of tax withholding to nonemployee compensation and including payments to small businesses in the document matching program to reinforce the voluntary compliance system.

Criminal Prosecution of Tax Return Preparers

2008 ◽  
Vol 6 (1) ◽  
pp. 24-42
Author(s):  
Nancy B. Nichols
Keyword(s):  
Income Tax ◽  
Tax Credits ◽  
Internal Revenue Service ◽  
Criminal Investigation ◽  
Criminal Prosecution ◽  
Earned Income ◽  
Financial Crimes ◽  
Tax Returns ◽  
The Government

Over 61 percent of individual taxpayers, accounting for more than 76 million returns, utilized the services of paid preparers in 2005. However, hiring a paid preparer does not assure the taxpayer or the government that the return will be prepared correctly. Tax return preparer fraud generally involves the preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns completed for their clients or fictitious taxpayers. Preparers may also manipulate income figures to fraudulently obtain tax credits, such as the earned income tax credit. The Criminal Investigation (CI) division of the Internal Revenue Service (IRS) prosecutes the most serious cases of preparers suspected of criminal or fraudulent behavior and other related financial crimes. This article investigates the role of CI in prosecuting tax return preparers and analyzes the results of 377 published tax return preparer criminal tax cases from 2000 through 2005. The paper also reviews various alternatives for discouraging fraudulent behavior, including registration of all paid preparers, automatic return preparation by the IRS, more stringent preparer penalties, and improved collection of assessed preparer penalties.

6 Extraterritorial Application of U.S. Law

2020 ◽  
Author(s):  
Bradley Curtis A
Keyword(s):  
Due Process ◽  
The United States ◽  
Criminal Prosecution ◽  
Constitutional Rights ◽  
Habeas Corpus ◽  
State Laws ◽  
Guantanamo Bay ◽  
The Supreme Court ◽  
The Right

This chapter considers the application of federal and state law to conduct that takes place outside the territory of the United States. It begins by discussing the territorial scope of U.S. constitutional rights. Special consideration is given to the extraterritorial application of the right of habeas corpus in light of the Supreme Court’s 2008 decision in Boumediene v. Bush, concerning the habeas corpus rights of detainees at the Guantanamo Bay naval base in Cuba. The chapter then discusses the “presumption against extraterritoriality” that the Supreme Court applies when interpreting federal statutes. For situations in which the presumption is overcome or is inapplicable, the chapter explains how customary international law principles relating to prescriptive jurisdiction can be relevant in U.S. litigation through application of the Charming Betsy canon of construction. In addition, the chapter discusses the role of “universal jurisdiction” in U.S. litigation and criminal prosecution. Possible constitutional limitations on the extraterritorial application of both federal statutes and state laws, based on due process and other considerations, are also considered.

The Role of Auditors, Non-Auditors, and Internal Tax Departments in Corporate Tax Aggressiveness

2015 ◽  
Vol 91 (1) ◽  
pp. 179-205 ◽  
Author(s):  
Kenneth J. Klassen ◽  
Petro Lisowsky ◽  
Devan Mescall
Keyword(s):  
Tax Compliance ◽  
Tax Planning ◽  
Internal Revenue Service ◽  
Corporate Tax ◽  
Tax Aggressiveness ◽  
Big 4 ◽  
Confidential Data ◽  
Tax Preparer ◽  
Tax Returns

ABSTRACT Using confidential data from the Internal Revenue Service on who signs a corporation's tax return, we investigate whether the party primarily responsible for the tax compliance function of the firm—the auditor, an external non-auditor, or the internal tax department—is related to the corporation's tax aggressiveness. We report three key findings: (1) firms preparing their own tax returns or hiring a non-auditor claim more aggressive tax positions than firms using their auditor as the tax preparer; (2) auditor-provided tax services are related to tax aggressiveness even after considering tax preparer identity, which supports and extends prior research using tax fees as a proxy for tax planning; and (3) Big 4 tax preparers, in particular, are linked to less tax aggressiveness when they are the auditor than when they are not the auditor. Our findings help policymakers and researchers better understand an important feature of tax compliance intermediaries; particularly, how the dual role via audits is related to observable corporate tax outcomes.

scholarly journals A Critical Review of the Characteristics of Presumptive Tax Systems in Developing Countries

2021 ◽  
Vol 17 (2) ◽  
pp. 27-43
Author(s):  
Munyaradzi Duve ◽  
Daniel P. Schutte
Keyword(s):  
Developing Countries ◽  
Small Businesses ◽  
Tax Compliance ◽  
Empirical Literature ◽  
Formal Sector ◽  
Tax System ◽  
Classification Framework ◽  
Tax Systems ◽  
Compliance Behaviour ◽  
System Characteristics

This paper considers the effect of the presumptive tax system characteristics on the tax compliance behaviour of small businesses in developing countries. Since the concept of presumptive taxation involves several features influencing the formalisation of small businesses, this paper seeks to survey three key areas of literature: targeted taxpayers, thresholds and timeframe. This paper differs fundamentally from previous studies in that it analyses presumptive tax system characteristics. A descriptive review approach was followed in evaluating the empirical literature on presumptive tax system characteristics. A content analysis was then performed on literature about categories and subcategories provided in the classification framework. The review highlights similarities and conflicting evidence of presumptive tax system characteristics in transforming the compliance behaviour of small businesses. It was concluded that the blended use of information technology and existing presumptive tax systems can facilitate the movement of small businesses from the informal to the formal sector.

scholarly journals BUSINESS CHARACTERISTICS, TAX ADMINISTRATION AND TAX COMPLIANCE BY SMES IN NIGERIA

2018 ◽  
Vol 3 (Special) ◽  
pp. 7-17
Author(s):  
Abidemi C. Adegboye ◽  
Ifeoluwa Alao-Owunna ◽  
Monday I. Egharevba
Keyword(s):  
Ownership Structure ◽  
Small Businesses ◽  
Tax Compliance ◽  
Small Scale ◽  
Tax Administration ◽  
Business Taxes ◽  
Personal Taxes ◽  
Tax Education ◽  
Compliance Behaviour

This study evaluates the relative impacts of tax administration and business characteristics on the tax compliance behaviour of small scale businesses in Nigeria. The role of tax education as an effective tax administration strategy is also considered. Results show that tax education stimulates small businesses tax compliance behaviour, a result that is robust for both business taxes and personal taxes. It is also found that overall tax administration system in Nigeria does not have significant impact on tax compliance among small businesses in Nigeria due to inefficiencies and corruption in the system. Business ownership structure, registration status, and management qualification/experience are all found to promote tax compliance by small businesses in Nigeria.

From Workers to Owners: Latino Entrepreneurs in Harrisonburg, Virginia

2007 ◽  
Vol 66 (3) ◽  
pp. 240-248 ◽  
Author(s):  
Laura Zarrugh
Keyword(s):  
Small Businesses ◽  
The United States ◽  
Structured Interviews ◽  
Labor Migrants ◽  
The Social ◽  
Gateway Cities ◽  
Processing Plants ◽  
Poultry Processing ◽  
Latino Entrepreneurship

In the vast literature on immigrant and ethnic entrepreneurship in the United States, relatively little attention has been paid to Latino entrepreneurship, perhaps because Latinos (except Cubans) tend to be perceived as labor migrants. For the same reason, even less attention has been given to the Latino small businesses that have quickly become a ubiquitous part of new Latino settlements in the rural South over the past two decades. Based on structured interviews with over 30 Latino business owners, this paper describes the growth of Latino-owned businesses in Harrisonburg, Virginia (population 40,468 in 2000) that has occurred since 1990 in tandem with the ever-increasing size and complexity of the local Latino community. In particular, the paper examines both the "structure of opportunity" for Latino entrepreneurship outside traditional gateway cities and the social and cultural characteristics of the entrepreneurs and their businesses. The paper highlights the role of local poultry processing plants in the settlement process and entrepreneurs' work histories.

The Not-So-Infernal Revenue Service?

2018 ◽  
Author(s):  
Romain Huret
Keyword(s):  
United States ◽  
Early Republic ◽  
Common Ground ◽  
Tax Compliance ◽  
The United States ◽  
Ground Model ◽  
Tax System ◽  
Social Actors ◽  
Social Legitimacy ◽  
Tax Regimes

This chapter describes the central issue of tax collection and the reasons why people still comply with the federal tax system in the United States. The current coercive model implies that fear and enforcement officers are the main vehicles of tax compliance in a country so attached to the idea of freedom against tyranny. However, rather than a coercive model of compliance, the chapter proposes a common ground model based upon three elements that explain why Americans have accepted and, generally speaking, still accept the expansion of fiscal power: (1) social legitimacy of the state and its actors; (2) a reach-out consensus on the definition and measurement of incomes and wealth; and (3) the ability of taxpayers and tax collectors to find room for negotiation. A historical outlook on different tax regimes demonstrates how institutional and social actors have searched continuously for common ground since the Early Republic.

scholarly journals THE EMBODIMENT OF VOLUNTARY COMPLIANCE THROUGH UNDERSTANDING OF MSMEs TAX COMPLIANCE PERCEPTION

2021 ◽  
Vol 10 (1) ◽  
pp. 63
Author(s):  
I Nyoman Darmayasa ◽  
Ni Wayan Desy Widhi Utami ◽  
I Nyoman Mandia
Keyword(s):  
Social Norms ◽  
Tax Compliance ◽  
The Self ◽  
Tax System ◽  
Behavioral Compliance ◽  
A Value ◽  
Voluntary Compliance ◽  
Study Results ◽  
Tax Education ◽  
Interpretive Method

<p class="JurnalASSETSABSTRAK">ABSTRACT</p><p>This research aims to understand micro, small and medium-sized enterprises' (MSMEs) perception of tax compliance as an embodiment of voluntary compliance. This study uses a qualitative interpretive method. The results show the fulfillment of MSMEs taxation is affected by the application of fines/sanctions, tax audits, tax knowledge, tax education, trust in tax authorities, a fair tax system, social norms, and ease of tax administration. These factors internalize into a value in the self of MSMEs, which is reflected through behavioral compliance. The shaping of positive tax perception is capital to realize tax awareness. The study results contribute to the realization of MSMEs compliance, both tax authorities and MSMEs.</p><p class="JurnalASSETSABSTRAK"><em>ABSTRAK</em><em></em></p><p><em>Penelitian ini bertujuan untuk memahami persepsi wajib pajak usaha mikro kecil menengah (WP UMKM) tentang kepatuhan pajak sebagai bentuk perwujudan kepatuhan sukarela. Penelitian ini menggunakan metode interpretif kualitatif. Hasil penelitian menunjukkan bahwa pemenuhan kewajiban perpajakan WP UMKM dipengaruhi oleh penerapan denda/sanksi, pemeriksaan pajak, pengetahuan perpajakan, edukasi, kepercayaan terhadap otoritas pajak, sistem pajak yang adil, nilai sosial, dan kemudahan administrasi perpajakan. Faktor-faktor ini diinternalisasi menjadi sebuah nilai dalam diri WP UMKM yang kemudian tercermin melalui perilaku kepatuhannya. Pembentukan persepsi pajak yang positif merupakan modal untuk mewujudkan kesadaran pajak. Hasil penelitian berkontribusi terhadap perwujudan kepatuhan baik otoritas pajak maupun WP UMKM.</em></p>

scholarly journals Characterizing partisan political narrative frameworks about COVID-19 on Twitter

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Elise Jing ◽  
Yong-Yeol Ahn
Keyword(s):  
Small Businesses ◽  
Social Issues ◽  
Local Politics ◽  
Critical Role ◽  
The United States ◽  
Crisis Response ◽  
Framing Analysis ◽  
Membership Categorization ◽  
Political Narrative

AbstractThe COVID-19 pandemic is a global crisis that has been testing every society and exposing the critical role of local politics in crisis response. In the United States, there has been a strong partisan divide between the Democratic and Republican party’s narratives about the pandemic which resulted in polarization of individual behaviors and divergent policy adoption across regions. As shown in this case, as well as in most major social issues, strongly polarized narrative frameworks facilitate such narratives. To understand polarization and other social chasms, it is critical to dissect these diverging narratives. Here, taking the Democratic and Republican political social media posts about the pandemic as a case study, we demonstrate that a combination of computational methods can provide useful insights into the different contexts, framing, and characters and relationships that construct their narrative frameworks which individual posts source from. Leveraging a dataset of tweets from the politicians in the U.S., including the ex-president, members of Congress, and state governors, we found that the Democrats’ narrative tends to be more concerned with the pandemic as well as financial and social support, while the Republicans discuss more about other political entities such as China. We then perform an automatic framing analysis to characterize the ways in which they frame their narratives, where we found that the Democrats emphasize the government’s role in responding to the pandemic, and the Republicans emphasize the roles of individuals and support for small businesses. Finally, we present a semantic role analysis that uncovers the important characters and relationships in their narratives as well as how they facilitate a membership categorization process. Our findings concretely expose the gaps in the “elusive consensus” between the two parties. Our methodologies may be applied to computationally study narratives in various domains.

REWARD AND PUNISHMENT PROJECT APPROACH: Model development and pilot study

2017 ◽  
Vol 14 (2) ◽  
pp. 222-236
Author(s):  
Abdul Rahman
Keyword(s):  
Law Enforcement ◽  
Tax Compliance ◽  
Project Design ◽  
Design Matrix ◽  
Problem Analysis ◽  
Public Official ◽  
Tax System ◽  
The Government ◽  
Reward And Punishment

Tax sanctions are vital for tax system to ensure tax laws to be obeyed. Despite the importance of tax sanctions, low feedbacks and law enforcement may limit the effectiveness of a tax system and reducing trust on the government. Therefore, the role of public officials in law enforcement is important. However, studies related to the role of tax sanction and public official are dearth. One of them is the study focusing taxpayers employed in public sectors. This study highlighted the tax sanction as the lowest assessment and effect on tax compliance. Then, the study conducted recommended the reward and punishment as a notion of other form of tax sanctions. This paper focuses on the development of model of reward and punishment based on the Project Design Matrix (PDM) by the steps involving problem analysis, objective analysis, generating project design matrix. The developed project provides a foundation for government and for future studies regarding reward and punishment in the tax sanction framework.

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