TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, August 11, 2008

People Who E-File Their Tax Returns Are More Likely to Cheat

Canadian Press:  People Who e-File Taxes More Likely to Cheat: Report:

Canadians who file their income-tax returns electronically are more likely to cheat, a newly released report suggests. An internal analysis by the Canada Revenue Agency found individuals who sent their tax returns through the Internet — the so-called Netfile option heavily promoted by Ottawa — were more likely to understate the amount of taxes owed. ...

The department analyzed random returns from the 2005 taxation year, which were filed in 2006, estimating about 15% of returns were non-compliant. That translated to about $569 million in taxes owed, but not declared. But closer examination showed Canadians who sent in paper returns — attaching receipts — were more likely to comply with tax laws. ...

The report also found Canadians who use tax software to prepare their returns appear to be more likely to cheat. Analysts examined tax returns filed to the agency on paper, separating them into those prepared with the help of tax software and those prepared by hand. ‘‘Software users … do demonstrate a significantly higher non-compliance rate as compared to non-software users,’’ they concluded.

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I guess it all depands on the people that review the pre-made reports. The Tax software cannot do all the work by itself

Posted by: Eitan Yariv | Sep 30, 2008 2:11:06 AM