Tax Cheat

AAA

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.

INVESTOPEDIA EXPLAINS 'Tax Cheat'

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.

RELATED TERMS
  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. Financial Action Task Force (FATF)

    An intergovernmental organization that designs and promotes policies ...
Related Articles
  1. Retirement

    Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  2. Taxes

    How To Report A Tax Cheat

    If you report a tax evader to the IRS, you could be eligible for a reward.
  3. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  4. Taxes

    Taking A Look At Tax Havens

    These tax-free zones might sound appealing, but the consequences often aren't.
  5. Taxes

    What To Do If You Lost Your W-2

    There's no need to panic if you don't have your Form W-2 to file taxes, there are easy ways to gain access to the missing form or file without it.
  6. Taxes

    Will Itemized Deductions Get You A Bigger Refund?

    April and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.
  7. Credit & Loans

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  8. Taxes

    The First Thing You Should Do With Your Tax Refund

    Nobody likes to pay taxes, but everyone loves to get a tax refund. When the check arrives in the mail, it's hard to resist spending it on some indulgence.
  9. Taxes

    How Does An IRS Audit Work?

    It doesn't automatically mean an IRS agent will be ringing your doorbell. Here are the different types of IRS audits and how to handle them.
  10. Taxes

    What is the Effective Tax Rate?

    The effective tax rate is the average rate at which an individual or corporation is taxed per year.

You May Also Like

Hot Definitions
  1. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  2. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  3. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  4. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  5. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  6. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
Trading Center