...vital that we focus relentlessly on cracking down on those that break the law and making sure that everyone pays the tax they owe” (HM Revenue & Customs, 2012, p. 4) Every year the UK Government spends billions of pounds to provide a better life for its citizens. Most of the money the Government is spending comes from tax revenue. Tax revenue allows the Government to budget expenditure such as education, health and welfare, housing, protection, re-paying national debts and improving the infrastructure. Without tax revenue, the government would not be able to fund the projects and services that people require. Following the recent recession and the global financial crisis it is important to increase tax revenue for economic growth and keeping the economy moving. The majority of the UK’s individuals and businesses pay their share of tax honestly. However, a minority deliberately seek to evade or avoid paying what they owe while benefiting from the public services (HM Revenue & Customs, 2013). As a result the Government does not receive enough tax as budgeted but spends more than what is collected. This is called budget deficit. It leads to either cuts in the budget of projects or borrowing money from other nations to fill up the deficit. Borrowing is an expensive option and currently the UK government is trying to reduce its national debts and to fill up the deficit with cuts in projects. For example, the UK Chancellor George Osborne recently announced further...
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...14-07 eVade Pays Up Synopsys eVade, an online retailer, operates distributions centers in many states including State X. eVade does not collect or remit sales taxes to State X. As a December 31, 2011 eVade has operated in state X for five years. In recent court ruling, States X states that the company would be subject to collect sales taxes. Although the company considers the risk of detection to not be probable, eVade estimated the total amount of sales tax payables for the past five years to be $50 millions plus $6 million in interest and $ 4 million in penalties. On March 15, 2012, State X established a tax amnesty program. Any unregistered taxpayer who voluntarily registers to collect tax will be forgiven 50 percent of all unpaid sales tax and all interest and penalties. eVade decides to take advantage of this program. Issue 1 As of December 31, 2011 What amount, if any, of sales taxes due should recognized in eVade ‘s financial statements? Scope In order to analyze what part of the sections sections of the FASB Accounting Standards Codification applies to the case, ASC 450 section was examined since non-income taxes are often accounted for under the contingencies guidance. Next, ASC 740 section was also studied. ASC 740-10-20 defines “income taxes as domestic and foreign federal (national), state, and local (including franchise) taxes based on income.” Since sales taxes are under the umbrella of local and state, the following step will be defining if eVade should...
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...ACTG 493, Accounting Cases, Research and Analysis Group Case 1 Memorandum To: Professor Siyi Li From: Group 4 Date: July 5, 2016 Subject: eVade Pays Up (Deloitte Trueblood Case 14-07) I. Case Description and Key Facts eVade is an online retailer that fulfills its orders by shipping its products directly to customers across all 50 states in the U.S. eVade does not have a brick-and-mortar store presence in any state, but does operate distribution centers in various states, including State X. eVade does not collect or remit sales tax to State X. This practice is consistent with eVade’s practice in all 50 States. In recent court rulings, State X has taken the position that operating a distribution center within the state constitutes nexus and thus would subject any company operating a distribution center to collect and remit sales tax on all sales made within the state. As of December 31, 2011, eVade has operated a distribution center within State X for the past five years. Although the company considers the risk of detection to not be probable, eVade estimates total sales tax payable to State X to be $50 million. In addition, eVade estimates that $6 million in interest and $4 million in penalties are also payable to the state. On March 15, 2012, a tax amnesty program was established by the Governor of State X. The program provides that an unregistered taxpayer who voluntarily registers to collect sales tax prospectively will be forgiven...
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...! Case 1: 14-07, eVade Pays Up ! ! ! ! 1. As of December 31, 2011, what amount, if any, of sales taxes due should be recognized in eVade’s financial statements? ! According to ASC 450-20-25-2, 450-20-25-6, 450-20-25-7, since eVade considers the risk of detection as not probable, there is no need to make any provision as on 31st of December, 2011. However, suitable disclosure has to be given in notes to financial statement about this loss contingency and amount of loss to be disclosed in the said notes would be $50+ $6+ $4 = $60 million. ! ! 2. What effect, if any, does eVade’s decision to participate in the tax amnesty program have on the amount recognized as of March 31, 2012? ! ! In March 15, 2012 Company has decided to participate in the amnesty program. Therefore, conforming to ASC 250-10-50-9 and ASC 250-10-50-11, eVade should recognize the amount of liability for $25 million in the financial statements on the 31st of March, 2012. the loss will be impacting 2012 financial statements and will not have retrospective impact on the 2011 financial statements. ! ! 3. What amounts should be recognized in the financial statements for the $25 million payment on June 15, 2012? ! ! Regarding the ASC 606-10-55-49 and ASC 250-10-50-8, 2011 financial statements would remain unchanged and $25 million payment would be recorded as charge to the 2012 financial statements. If the amount is already recognized as a liability in March, then...
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...“TAX EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
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...THE NETHERLANDS AIAS Working Paper 03/11 May 2003 Dr. Klarita Gërxhani AMSTERDAM INSTITUTE FOR Prof. Dr. Arthur Schram ADVANCED LABOUR STUDIES Universiteit van Amsterdam © Klarita Gërxhani Amsterdam, May 2003 This paper can be downloaded at www.uva-aias.net/files/aias/WP11.pdf Amsterdam Institute for Advanced Labour Studies Tax Evasion and the Source of Income: An Experimental Study in Albania and the Netherlands 5 Tax Evasion and the Source of Income: An Experimental Study in Albania and the Netherlands∗ Abstract A series of experiments among different social groups in both Albania and the Netherlands give the opportunity to compare behavioral patterns related to tax evasion. Aside from the decision whether or not to evade taxes, subjects have to choose a source of income, where one type enables subsequent tax evasion. The results allow us to conclude that subjects take the possibility...
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...“TAX EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
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...“TAX EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
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...International Journal of Accounting and Financial Reporting ISSN 2162-3082 2014, Vol. 4, No. 2 Causes of Tax Evasion in Pakistan: A case study on southern Punjab Waseem Ahmad Khan (Corresponding author) Lecturer, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan E-mail: waseemkhan_hcbf@yahoo.com, Tel: +92-333-3133540 Prince Fawad Ahmad Student, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan Accepted: October 15, 2014 DOI:10.5296/ ijafr.v4i2.6484 URL: http://dx.doi.org/10.5296/ ijafr.v4i2.6484 Abstract Introduction: Tax evasion is main problem in Pakistan due to which Pakistan remains under a lot of stress. Tax evasion results in less revenue. Many causes have been discussed which play major role in tax evasion in Pakistan. It is a primary research. Literature review: Many authors have discussed impacts of tax evasion in different sectors of economy. Previously tax evasion cause major trouble in Tanzania & Greece. Methodology: A questioner has been filled by targeted population of 100 Professionals & Business students of Department of Management Sciences Islamia University of Bahawalpur. Questioner was consisted of 5 major parts i.e. Tax System, High rate, Go with the flow, Corrupt Govt. & Progressive taxation. Findings: Most of the population agrees that these causes play a vital role in the tax evasion in the Pakistan. Conclusion: Tax evasion is main problem of Pakistan which...
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...TABLE OF CONTENTS Marking scheme........................................................................................i Turnitin Report.........................................................................................ii Introduction...............................................................................................1 Importance of separate legal entity..........................................................2 Lifting veil of corporation.........................................................................4 Conclusion..................................................................................................7 References..................................................................................................8 Introduction In Malaysia, the legislation governing the formation and operation of companies is the Companies Act 1965. Section 14(1) of the Companies Act 1965 states that company are incorporated under the law which begins with the two or more people association as they use their names to become the subscriber in memorandum and all requirement of the registration are complied. Hence, then the company is formed, then it’s called “incorporated”. After being issued with a certificate of incorporation, a company has a legal status separate from the members. In law, the company is treated as a person. Whatever happen in the company, the members of the company should not receive any impact as it was distinguished from company. Wrong...
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...colleges. My school offered a lot of fresh vegetables as most of the farmers in India grow them. The market price of fruits and vegetables is very low, unlike the market price for milk and other dairy products and there is a lot more demand. I think the government is helping the nation as a lot of children suffer from malnutrition in India and fresh fruits and vegetables help them get healthy. 2. Read the “Economics in Action” story of “‘Black Labor’ in Southern Europe” on page 132. How do people in those countries evade the minimum wage floor? What do you learn from this story? Answer – People in countries like Italy and Spain simply do not report that they are employed. Companies who are willing to pay them below the minimum wage hire them and they accept it. These people who report themselves as unemployed, collect unemployment check after complaining that the line was too long because they had to go back to “work”. Employers have also found legal ways to evade the price floor. Employers and companies, instead of growing, stay small in order to avoid paying minimum wage as regulations only force large industries to...
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...Domingo Guarino, Romeo Galve, Dominador Sabina, Felipe Radiana, Gavino Sualibio, Moreno Escares, Ferdinand Torres, Felipe Basilan, and Ruben Robalos,respondents. D E C I S I O N HERMOSISIMA, JR., J.: The corporate mask may be lifted and the corporate veil may be pierced when a corporation is just but the alter ego of a person or of another corporation. Where badges of fraud exist; where public convenience is defeated; where a wrong is sought to be justified thereby, the corporate fiction or the notion of legal entity should come to naught.The law in these instances will regard the corporation as a mere association of persons and, in case of two corporations, merge them into one. Thus, where a sister corporation is used as a shield to evade a corporations subsidiary liability for damages, the corporation may not be heard to say that it has a personality separate and distinct from the other corporation. The piercing of the corporate veil comes into play. This special civil action ostensibly raises the question of whether the National Labor Relations Commission committed grave abuse of discretion when it issued a break-open order to the sheriff to be enforced against personal property found in the premises of petitioners sister company. Petitioner Concept Builders, Inc., a domestic corporation, with principal office at 355Maysan Road, Valenzuela, Metro Manila, is engaged in the construction business. Private respondents were employed by said company as laborers, carpenters and...
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...his company and be the best he could be. His bold statement of wanting to be the next General Electric evidences this point. He grew the company from a $2 billion company when he assumed power to a conglomerate with a market capitalization of $120 billion and annual sales of $36 billion. I believe in the midst of all this success, Kozlowski began to feel too important and too greedy. When he began manipulating documents to cover up his dirty tracks and wasn’t penalized, it made him feel more invincible to authorities. Being the highest paid CEO in the country at the time, you would think $1 million in taxes shouldn’t be a problem. But dislike for taxes and his greedy nature probably prompted him to evade on the taxes for the artwork. Kozlowski was convicted in 2005 for purchasing artwork for approximately $14.7 million with Tyco funds for his personal use, receiving $81 million in unauthorized bonuses and also for paying hush money to any employee with knowledge of the scheme he was carrying out in the company. Kozlowski’s decision to try and evade the New York taxes on the artworks he purchased was what blew the scheme wide open to the public. It was alleged that Kozlowski paid huge compensations to employees like the CFO Mark Swartz, and Tyco’s legal counsel Mark Belnick and some board of directors who weren’t named. The author also questions the impact; control and oversight the Board of Directors had over Kozlowski’s dealings and the financials of the company. Since Kozlowski...
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...Tracy and Mark both have jobs that take them away from home for long hours. They are not spending the night away but they still require sleep in the middle of their shift in order to remain safe. Facts: Tracy and Mark both work in positions that take them away from home for extended periods of time thus requiring them to sleep in the middle of their shifts. Conclusion: If the nature of the taxpayer's employment is such that when away from home, during released time, it is reasonable for him to need and to obtain sleep or rest in order to meet the exigencies of his employment or the business demands of his employment, his expenditures (including incidental expenses, such as tips) for the purpose of obtaining sleep or rest are deductible traveling expenses under Section 162(a)(2). Analysis: The “Sleep or rest rule” clearly states that even if there is no provision for sleep or rest the time the individual uses to rest is considered necessary to perform their job. As per Williams V. Commissioner the time used by both individuals for sleep, rest, meals, etc. is deductable. The following is an excerpt from our book which references the tax law and clearly shows that both individuals have the right to claim there meals, lodging, and incidentals. Shortly after Williams was decided, the Commissioner issued Rev. Rul. 61-221, 1961-2 C.B. 34, which announced his concurrence with the sleep or rest rule as in terpreted in Williams. 9 The Supreme Court in United States v. Correll...
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...CHAPTER I INTRODUCTION The desire to build a civilized country with a strong and sound economy is the desire of every patriotic Ghanaian citizen. Tax payment is the demonstration of such a desire, although most income earners see it as a means of exploitation by the government. Tax payment is a voluntarily contribution imposed by the Government on personal income earners, companies, investors, exporters, importers etc. revenue realised from taxation is a major source of revenue to the Government of Ghana, and as such is an important tool used in the development of Ghana and her economy. However, tax evasion which is the wilful and deliberate violation of the law in order to escape payment of tax, posses a big threat to income taxation in Ghana as it reduces tax revenue to the Government, thereby hampering economic growth and development. However, this research was undertaken to help increase revenue generated from income tax to the government, by pointing out the challenges faced by tax officials in discharging their lawful duties. Various challenges such as tax evasion on the part of the income taxpayers drastically reduce income tax revenue to the government. This has been a big problem for decades and needs to be properly addressed. 1.1 BACKGROUND OF THE STUDY AND PROFILE OF THE ORGANIZATION After a thorough research on the revenue structure of Ghana, it became evident that revenue from tax was a big source of income to the government of Ghana, and needed much attention...
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