Tax evasion simply means avoiding tax by adopting dishonest means. All methods by which tax liability is illegally avoided are termed as tax evasion.

-          Stating an untrue statement knowingly

-          Submitting misleading documents

-          Suppression of facts

-          Not maintaining proper accounts of incomes

-          Omission of materials facts

-          Maintaining multiple sets of accounts

-          Operating business transactions under different names

-          Fragmentation of incomes

-          Over reporting of expenses

-          Non-reporting of expenses

 

Stating wrong statement knowingly

 

Cash: Postpone paying supplier, so that the period-end cash appears higher than it should be.

Accounts Receivable: Manipulation in bad debt expense.

Capitalization: Capitalize smaller expenditures that would normally be charged to expense, to increase reported profits.

Fixed assets: sell of the fixed assets with large amounts of accumulated depreciation associated with them, so the net book value of the remaining assets appears to indicate a relatively new cluster of assets.

Revenue: offer buyers an early shipment discount,

Depreciation: switch form accelerated depreciation to straight line depreciation in order to reduce the amount of depreciation charged to expense in the fiscal year.

Expenses: Withhold supplier invoices, so that they are recorded in a later period.

Short Term Borrowing: Short term borrowing is obtained to maintain the liquidity position of the organization.