In the text, find the answers to the following questions. 1. What is the difference between the roles of the government’s legislative and executive branches?

1. What is the difference between the roles of the government’s legislative and executive branches?

2. What powers or jurisdictions does tax administration hold?

3. What is tax evasion?

4. What are the possible punishments for committing tax evasion?

5. What are the possible reasons for tax evasion?

Exercise 2. Find a word in the text that matches each definition below. The words appear in order.

1. (two words) A part of government that implements laws           __________

2. The authority that a particular court of law has to make laws        __________

3. The act of obeying an order, rule or request                          __________

4. (three words) An identifying number used for tax purposes in the United States                                                                                     __________

5. (two words) Use of illegal methods to avoid paying tax             __________

6. (two words) Intentionally falsifying information on a tax return to avoid paying the entire amount of tax obligation                                         __________

7. (two words) The money that a government has available to spend from taxes and borrowing                                                                         __________

8. The punishment of being put into prison                                   __________

9. The effect that an action or decision will have on something else in the future

                                                                                                  __________

10. (two words) The crime of creating the appearance that money obtained from illegal activities originated from a legitimate source                   __________

 

Exercise 3.

Tax-Related Crimes

Match an expression from the box to a tax offence given below to make sentences.

              Example: The taxpayer was charged with tax evasion.

to commit	to perpetrate	to be accused of
to be charged with	to be prosecuted for	to be arrested for
to be brought to justice for	to witness	to be convicted of

 

1. Tax Fraud

2. Tax Evasion

3. Failure to file a tax return

4. Filing a false tax return

5. Wilful failure to keep financial records

6. Failure to supply requested information

7. Submitting false tax documents

8. Making false statement to government tax officials

9. Underreporting income

10.  Making unsubstantiated deductions

 

GRAMMAR FOCUS:

Exercise 4.

1^st Conditional

Work with a partner. Use the prompts below to ask questions as in the example below.

Example: What happens if a taxpayer commits a tax fraud?

If a taxpayer commits a tax fraud, he will be prosecuted by tax administration.

 

tax fraud	make a false statement	submit false documentation
tax evasion	fail to file a tax return	make unsubstantiated deductions
money-laundering	underreport the income	willfully fail to keep records

 

2) Use the prompts below to interview your partner:

    What will you do if……….?

 

§ your client asks you to cook the books for him

§ your boss asks you to move to a branch in a different town

§ the rival firm offers you a much higher salary

§ your boss asks you to give a presentation in English

§ you finish work early today

§ your team members seem unmotivated

Report the information to the class.

Exercise 5. Text completion.

Read the text and complete it with the following words.

unlawful activities     offshore                    underreporting

asset protection          deliberate                 tax havens               

confidentiality           laws                          tax avoidance

Tax Havens

With income and corporate tax in some countries reaching 40% rate, not everybody is willing to part with such a large amount of their income. As a result, many individuals and companies employ all available legal means to reduce their tax liability. This practice of lawful minimization of tax liability is known as __________ (1). Tax avoidance is achieved through a sound financial planning and legal exploitation of tax laws to one’s own advantage. Tax avoidance methods include effective use of tax exemptions, tax deductions and tax credits, transfer of assets to __________ (2), use of legal loopholes and other legal schemes.

    Countries such as Bermuda, Cyprus or Cayman Islands offer foreign businesses and individuals little or no tax liability in an economically and politically stable environment. These countries, known as tax havens, offer absolute ___________ (3) and privacy, which means no disclosure of information with regard to the owners of assets.

    Tax havens do not require from an individual to reside or operate their business from the __________ (4) country to benefit from their tax policies. Furthermore, in most tax havens, offshore bankingis tax free, which means that there are no taxes applied to the interest earned in offshore bank accounts. Similarly, in most tax havens there are no exchange control _______ (5), which means that money can be transferred in and out of tax haven without limitations or having to declare the source of funds.

    Perhaps, the most important advantage that offshore tax havens provide to their clients is the __________ (6). They offer a safe place for their clients’ assets and many individuals or businesses choose to go offshore to protect assets from creditors, lawsuits or being investigated by tax authorities.

    However, for some taxpayers legal means are not always a sufficient tool for minimizing tax liability. Certain individuals and companies would do anything to avoid paying taxes and even resort to __________ (7) to attain that goal. Tax evasion, or use of illegal methods to avoid paying tax, most commonly involves a __________ (8) misrepresentation of revenue and profit. Other forms of tax evasion include failing to report cash income; taking unauthorized deductions for personal expenses; falsely claiming charitable deductions; overestimatingthe value of non-cash donations; filing a false tax return by omitting property or knowingly _________ (9)its value; paying employees in cash.