How Tax Evasion Can Affect an Entire Nation

For the past few months, the debt crisis in Greece has been in the news a lot as the European Union struggles to work out a new bailout plan with the beleaguered country and keep it in the Eurozone. There are a number of reasons why Greece has gotten to this point, but one that may be overlooked is tax evasion. Greece’s creditors have made it clear that Greece must do a better job of collecting on taxes in order to receive any more bailout money. According to a blog post in Bankrate about tax evasion across the world, Greece’s wealthy have been notorious in the past for not reporting all of their earnings. This has quickly added up to the point where Greece finds itself in a major debt.

However, if you think that this is just a Greece problem, think again. Did you know that in the last IRS estimate back in 2006, the IRS said that there is a tax gap of close to $400 billion in the United States? The majority of this difference in taxes owed and taxes paid was due to underreported earnings – essentially tax evasion. David Stewart has dealt with accusations of tax evasion, so he can attest that tax evasion is a very serious issue. It has far-reaching consequences, like what is going on with Greece. It could also have very personal consequences.

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A tax evasion charge can result in a number of unfavorable outcomes, including fines and even jail time. The amount of money you have and your status don’t matter either. There have been a number of high-profile individuals who have jailed due to tax evasion, including Martha Stewart and Wesley Snipes. A large tax gap could cause the IRS to become more active in its pursuit of tax evaders as $400 billion is a lot of money. You may not want to want to pay your taxes, but you certainly don’t want to deal with the consequences. Greece will have to get tougher with its tax collection rate, and the United States may have to as well. Therefore, just pay your taxes.