Underreporting of Income

Underreporting of income refers to the practice where individuals or businesses fail to accurately report all their earnings to tax authorities. This can occur intentionally, such as omitting cash transactions, or unintentionally due to errors in bookkeeping. It is often done to reduce tax liability, but it is illegal and can lead to penalties, audits, and legal trouble. Accurate income reporting is vital for tax compliance and helps fund public services, making it important for everyone to report their earnings truthfully.