Assignment 1

Name: Chibesa Bwalya

Student ID: 10294659
Course name: Induction Code: UU-ACG-4200-ZM-57530
Tutor’s Name: Denny Chakauya
Date: 1/10/2023
ANSWER 1

The term tax evasion describes an action by individuals, companies, trusts etc. of not
wanting to pay tax or reducing taxes by underreporting income so that they don’t pay the
full amount on the tax they are owing using illegal means. Tax evasion can be done in many
ways including; Hiding important information from the tax authorities and when the tax
payer fail to report incomed which is supposed to be taxed .When assets are hidden in
offshore accounts it is an indication of tax evasion. Smuggling and under declaring of assets
is also tax evasion. The other way is by giving information that is not true by including
expenses in the accounts that were not incurred. However, Tax avoidance is using legal
means to avoid paying tax or reduce on the amount of tax to be paid. Tax evasion is also
known as tax planning. Tax evasion is illegal and tax avoidance is legal that’s what
differentiates them. Tax evasion happens when the tax payer intentionally decides to break
the law while tax avoidance is a legal way a tax payer uses to reduce the tax to be paid.
Selling a capital asset on a different date instead of the expected date to ensure that the profit
is taxed in a later tax year is tax avoidance. Tax avoidance can also be identified by tax
avoidance schemes like loan payments, tax deductions, advance on deeds or exemptions that
become legally available in order to reduce tax liability. On the other hand declaring an
amount of K3000 to read as k300 or under declaring the number of goods sold in a taxable
period in order reduce tax its tax evasion. Using of the company property for use without an
important business reason is tax evasion. Even in cases where one tries to keep the business
off the books and decides to deal with just cash without receipts this may eventually turn
into tax evasion. When money is hidden, including shares or assets in an offshore account
its tax evasion.

ANSWER 2

Walter C. Anderson’s case happens to be one of the largest tax evasion in the USA. He was
an American telephone entrepreneur, he was arrested and he pled guilty to having two
accounts of federal tax evasion and in the other account he was guilty of swindling the
district Columbia because he did not declare the $365 million of income. His earnings were
being hidden through the use of aliases. This was done when Anderson further hide
owning the Gold & Appel in 1993 September after he managed to form Iceberg Transport
in the Republic of Panama. He did offshore bank account, this was done in order to avoid
paying taxes on $450 million he earned from business ventures between 1995 and 1999, and
shell companies of which his Individual Income Tax Returns for 1998 and 1999 removed of
about $126 million and $239 million of the income that was added accordingly. In this case
Anderson did the same thing of filling a false D.C. Income Tax Return for the tax year 1999
and he failed to report this same income. In 2006, Anderson accepted being a guilty and
admitted of hiding about $365 million worth of income. He was sent to prison for nine years
and compensation of $200million.The taxes were accepted by the IRS and the penalties
from the past 3 years were included in Anderson's case nevertheless, he was guilty of owing
$23 million to the government of the D.C. "The defendant is a successful entrepreneur who
made a fateful and criminal decision to devote his considerable business talents to an
elaborate tax avoidance scheme," stated U.S. Attorney Wainstein. The conviction of
Anderson demonstrated that the District and Federal governments made effort in ensuring
that criminals like Mr. Anderson pay very expensive price for cheating on fellow citizens.
Anderson happens to successful entrepreneur but he made a decisive and criminal decision
to give his influential and potential business talents and involve in tax avoidance scheme.
Tax law in each and every country is important to follow because tax is used to accomplish
other thing like building of bridges, build schools and helps in paying the teachers, help in
building courts and paying the judges etc. When someone fails to follow the tax law commit
the tax Flaud. In this case Walter Anderson committed tax Flaud. Anderson is said to have
created the greatest tax scam which is tax evasion. In the USA, tax evasion is regarded as
illegal whether by an individual, companies, trusts and other expected tax payer. Mr
Anderson was failing to pay and file in accordance with the tax code results in civil/
criminal penalties which are done by the USA tax court. In this case Anderson was
conducting tax evasion, he was very deliberate and intentional in trying to paint a false
picture to the tax authorities in order to reduce the expected tax he was required to pay. He
was not faithful in declaring profits and he complicated deductions in order to achieve tax
evasion. Usually people who have benefited are benefiting from taxes think they are not
mandated to pay the taxes, and that they can get away with this by hiding their income and
assets in offshore accounts and shell companies like Anderson did.
REFERENCE

Dr Tisa S (2022) 5 Famous Tax Cheats. Retrieved

from:https://www.investopedia.com/financial-edge/0110/five-famous-tax-cheats.aspx

Kaplan Financial limited (2019) Taxation, study text. Retrieved from:

https://kaplanpublishing.co.uk/docs/librariesprovider3/look-inside/acca/applied-skills/
taxation/look-inside-study-text-acca-taxation.pdf?sfvrsn=7e1e4701_4

United States Attorney Kenneth L.W (2006) Department of justice. Retrieved

from:https://www.justice.gov/archive/tax/usaopress/2006/txdv06Anderson_TaxEvasion.pdf