Podcast
Questions and Answers
What is the main difference between tax evasion and tax avoidance?
What is the main difference between tax evasion and tax avoidance?
What is the key element in establishing tax fraud?
What is the key element in establishing tax fraud?
What is the primary goal of a tax fraud investigation?
What is the primary goal of a tax fraud investigation?
What is the distinction between fraud and negligence in tax cases?
What is the distinction between fraud and negligence in tax cases?
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What is the purpose of classifying evidence in a tax fraud case?
What is the purpose of classifying evidence in a tax fraud case?
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What is the penalty for tax evasion?
What is the penalty for tax evasion?
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What is the main purpose of ghost companies?
What is the main purpose of ghost companies?
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What is the purpose of the Run After Fake Transactions (RAFT)?
What is the purpose of the Run After Fake Transactions (RAFT)?
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What is an example of tax evasion?
What is an example of tax evasion?
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What is the purpose of fictitious receipts/invoices?
What is the purpose of fictitious receipts/invoices?
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Study Notes
Tax Fraud and Tax Evasion
- Tax fraud: an intentional act to evade taxes, with an actual evil motive or intent to evade taxes legally due to the government.
- Negligence: an omission or act that a reasonable person would not do, or not doing something a reasonable person would do.
- Fraud: a generic term for deceit, deception, or trickery to induce someone to surrender something of value.
Distinction between Tax Evasion and Tax Avoidance
- Tax evasion: the elimination or reduction of tax liability by fraudulent means, criminally punishable with a fine of not less than P500,000 and imprisonment of not less than 6 years.
- Tax avoidance: an attempt to minimize tax liability by lawful means, not criminally punishable.
Examples of Tax Evasion
- Omitting to report income
- Understatement of income done intentionally
- Overstatement of deductions done improperly and intentionally
- Issuance of fictitious receipts/invoices to claim false deductions/expenses and input VAT
- Claiming false personal exemptions
Ghost Companies and RAFT
- Ghost companies: fake companies issuing fraudulent receipts/invoices for clients to claim false deductions.
- RAFT (Run After Fake Transactions): a national task force created by the BIR to stop the selling of fake receipts and/or invoices and conduct audit and enforcement activities against taxpayers claiming fake transactions.
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Description
Learn about the principles of tax fraud, identification of sources, and stages of fraud investigation. Understand the standard of proof required in criminal and civil cases.
