If a person fails to fully report his or her income and pay the proper amount in taxes, the government is likely to find out. The Internal Revenue Service does not take tax evasion lightly. While it may take time, Connecticut residents who intentionally, or unintentionally, underreport their income in order to pay less in taxes are likely to hear from the IRS eventually.
There are two ways in which a person may underreport his or her income. The first is by simply claiming to make less than he or she actually did during the tax year. The second is by claiming more credits, deductions and exemptions than one should.
Who is most likely to underreport their income? It is believed that individual filers, those who own their own businesses, are the most likely culprits. Those who get paid in cash are also more likely to claim less income than they actually made during the tax year. Without a paper trail or third-party reporting, it can be more difficult to track down those who are underreporting their income.
While there are those individuals in Connecticut and elsewhere who purposely underreport their income, there are also those individuals who make simple math errors or are unsure of the laws when filing their taxes. Such mistakes may be negligence, but they are not technically tax evasion. Those who are being accused of tax evasion can turn to legal counsel who will be able to review their cases and help them find swift resolutions.
Source: money.howstuffworks.com, “How Tax Evasion Works“, Dave Roos, Accessed on May 8, 2018