Tax fraud broadly encompasses all attempts by a taxpayer or entity to falsify information on a tax return or other document in order to reduce their tax liability. This can take the form of wrongly calculating the value of assets, using deductions and credits, or blatantly not reporting income. The key aspect of tax fraud is that it must be proven as a willful or intentional act. Tax fraud typically does not include honest mistakes in reporting income or applying tax law.
[Last updated in October of 2021 by the Wex Definitions Team]