Question

Identify the ways of tax evasion.

• A. Underreporting income
• B. Hiding money
• C. Filing tax returns
• D. Inflating expenses

Answer 1

Answer: (A), (B), (D)

Inflating expenses

The government has established an elaborate taxation system. However, there are many ways in which people avoid paying taxes. This is called tax evasion or tax fraud. Some methods include underreporting income, inflating expenses, and hiding money. An individual is expected to report the correct income and expenses.