In: Accounting
There are consequences that a company will face when they do not file taxes or are dishonest. Find at least one case where a company did not file taxes or were dishonest. Summarize the case and discuss how the company’s indiscretions will impact business in the future.
Ques. There are consequences that a company will face when they do not file taxes or are dishonest. Find at least one case where a company did not file taxes or were dishonest. Summarize the case and discuss how the company’s indiscretions will impact business in the future.
Ans. Company that does not file returns or are dishonest commit forgery. That is they commit punishable legal offence. Consequences of not filing taxes or being dishonest consist of imprisonment for directors, management and others officers of company who are involved in the act. Besides punishment there are hefty sum of fines and penalties imposed by law that far exceeds the amount they would have set aside by not filing taxes or dishonesty act.
Here we would like to discuss one such popular case of Walter Anderson. Anderson's case is the largest tax evasion case in the history of the United States. This former telecommunications executive was accused of hiding his earnings through the use of aliases, offshore bank accounts, and shell companies. In 2006, Anderson entered a guilty plea in which he admitted to hiding approximately $365 million worth of income. He was sentenced to nine years in prison, and restitution of $200 million.
Now in the present case of walter anderson company was no longer in existence after commitment of this forgery. So the question that arise here is that this company could have been functional and would have earned more than forged amount if fraud was committed. So based on above case we can conclude that not filing of taxes or dishonest act could lead company to closer to it's end.