Under Reporting

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Under Reporting

The act of deliberately understating personal income or corporate earnings. One usually underreports in order to pay less in taxes. For example, if one makes $50,000 in a year and reports $35,000, one does not pay taxes on the extra $15,000. Underreporting is illegal because it deprives the government of tax revenue.

Occasionally, underreporting refers to an illegal practice in which a company refrains from reporting earnings in one quarter in order to report them the following quarter. Companies usually do this to drive up the stock price.
References in periodicals archive ?
With most sizable transactions in society now linked to national identity card numbers, the tax authorities have a lot of data that can be used to find non-filers and get a better handle on underreporting.
Exhibit 2 depicts the major impact that third-party information reporting has on the individual underreporting tax gap--a little more than half of the underreporting gap derives from areas with little or no third-party reporting.
Motivated by empirical evidence, we focus on underreporting of self-employment income as a source of mismeasurement of value added.
In 2005, the underreporting rate stood at only 6 percent, and has continued to rise to 35 percent in 2013.
According to the agency, a Honda employee first identified the problem in 2011, and regulators notified the company of potential underreporting as early as 2012.
Young asked him if he knew he was underreporting income.
The theory presented in this study indicates that incentives can cause underreporting of time, but that such effects likely depend on the time delay between task completion and time reporting (time reporting delay).
This approach yields results statistically identical to the underreporting rate for the individual income tax return filing population estimated by the U.
The difference has prompted critics to claim that the funds are underreporting their unfunded liabilities, or the gap between what they've promised to pay retirees in the future and what they'll actually have on hand to cover the benefits.
The MLBPA will also be closely scrutinizing the reporting of these revenues because underreporting obviously reduces the amount of money available to players.
OSHA has initiated a new national emphasis program on recordkeeping in response to several studies of underreporting and congressional interest.
To monitor those who may be underreporting their income payments, the IRS relied on its examination and automated under-reporter programs.