Tax fraud and tax evasion resulting in underpayment can take many forms, including:
Underreporting of income due to investment in offshore tax havens
Improperly transferring tax benefits from one company to another by artificially depressing the income reported by U.S. entities based on manipulation of “transfer pricing” (e.g., the prices that one subsidiary charges to another subsidiary for goods or services)
Abusive tax shelters that lack any real economic purpose other than the evasion of taxes, including “Guam Trusts,” debt straddles, lease-in/lease-out transactions, S-Corp ESOP transactions, and off-shore deferred compensation arrangements.
Circular transactions in which funds are moved from one company to another to generate artificial tax benefits
Manipulation of the recognition of revenue or profits to maximize tax benefits