Listen to a Business English Dialogue About Deflection of tax liability
Mariah: Hi Eden, do you know what deflection of tax liability means?
Eden: Yes, Mariah. Deflection of tax liability refers to the illegal practice of shifting one’s tax burden to another entity or individual to avoid paying taxes.
Mariah: That’s correct. It often involves complex schemes or fraudulent activities aimed at misleading tax authorities.
Eden: How does deflection of tax liability differ from tax evasion?
Mariah: While tax evasion involves outright illegal actions to avoid paying taxes, deflection of tax liability may involve exploiting loopholes or engaging in deceptive practices to shift tax responsibility.
Eden: Are there any consequences for individuals or entities caught deferring tax liability?
Mariah: Yes, those caught deferring tax liability may face hefty fines, legal penalties, and reputational damage, and in some cases, imprisonment.
Eden: How can individuals and businesses ensure they are not engaging in deflection of tax liability?
Mariah: By complying with tax laws, maintaining accurate records, and seeking professional advice from tax experts to ensure transparency and legality in their tax practices.
Eden: Thank you for clarifying, Mariah.
Mariah: You’re welcome, Eden. It’s crucial for individuals and businesses to understand and abide by tax regulations to avoid legal and financial repercussions.