Tax Cheat


DEFINITION of 'Tax Cheat'

An individual (or group) who, through fraud, dishonesty or avoidance, does not pay the amount of tax that would be obligated if tax rules were properly followed. A tax cheat may improperly use tax shelters or purposefully miscategorize earnings and expenses under the pretense that the government will not miss the lost revenue because of the obligation's size relative to all taxes collected. Those found to be cheating on their taxes may be subject to fines, penalties or imprisonment.


The Internal Revenue Service (IRS) allows taxpayers to report individuals and organizations that they suspect are tax cheats. As an incentive, it provides a potential reward if it is found that those being reported did, in fact, underpay taxes.

  1. Income Tax

    A tax that governments impose on financial income generated by ...
  2. Abusive Tax Shelter

    An investment scheme that claims to reduce income tax without ...
  3. Tax Evasion

    An illegal practice where a person, organization or corporation ...
  4. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  5. Tax Avoidance

    The use of legal methods to modify an individual's financial ...
  6. Skinny Down Distribution

    Skinny down distribution is corporate practice of slimming down ...
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  3. Are IRS audits random?

    While the U.S. Internal Revenue Service (IRS) conducts some of its tax audits using random selection based on a statistical ... Read Full Answer >>
  4. Does the IRS report to credit bureaus?

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