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Posted by: | Posted on: February 3, 2021

Understanding facts about Tax Shark

The deployment of compliance officers in virtually every tax office was followed up with early success. Tax Shark is one of the authority sites on this topic. Revenue Investigation Officers regularly scan advertisements in local newspapers or shop windows and they frequently had access to reverse telephone directories even before the advent of the modern personal computer to track moonlighters from bare telephone number details. They also study deposit and loan databases for banks and other financial institutions, customs records, and star class hotel bookings for private functions and ceremonies to identify rich people who may be evading taxes.Alternatively, non-extractive fraud may arise because, for example, the tax base is less than comprehensive, because not all economic income is subject to income tax. ï? ~ The ability to take advantage of tax differences by converting high-tax activities into low-tax activities is needed. If there are differences in tax rates, but there is no ability to move from high to low, there is no possibility of arbitrage. ï? ~ This does not make tax arbitrage and avoidance possible even if these two conditions are fulfilled. The tax system can mix high and low-rate taxpayers with one another. A high-rate taxpayer may be able to divert a low-rate taxpayer’s income to a low-rate taxpayer or convert a low-taxed form of highly taxed income. However, this is pointless unless the high-rate taxpayer can be rewarded for diverting or converting his or her income into a low-tax category in a low-taxed form. In a low-tax form, the income has to come back. The benefit must also exceed the expense of the transaction. This is the third necessary condition for tax arbitrage to take place. Tax arbitrage and avoidance are inherent in tax systems, since all tax systems have bases that are less than comprehensive due to the impossibility of defining and measuring all economic revenue. For instance, this includes profit switches or timing differences: