Brazil Identifies Tax Fraud Cases: Daily

By Anna Kaiser, Contributing Reporter

RIO DE JANEIRO, BRAZIL – With three days left to still file taxes for Brazil’s 2013 tax season, the Receita Federal (equivalent to the IRS, Internal Revenues Services) has already found 21,000 tax forms suspicious of fraud. The most common “irregularity” suggests that companies are altering values of salaries and tax returns.

In these 21,000 cases, the Receita Federal found that numbers reported by individuals income tax (Portuguese acronym IR) did not match the documents provided by the company (Portuguese acronym DIRF). Companies fraudulently increased the value that taxpayers should receive in their tax return.

Those under suspicion will have previous year’s taxes, as far back as 2008, reevaluated to check for fraud. In addition to those 21,000 suspected of exaggerating their tax returns, the Receita Federal is planning on investigating over 300,000 cases of unauthorized deductions on income tax and also launching an initiative to catch operations that manipulate statements on income taxes.

Sub-Secretary of Monitoring, Caio Marcos Cândido, warned the public, “We are here to say to taxpayers that it is not worth it to fake an individual’s income tax. [….] We want to say this to the taxpayers who did their declarations correctly, because we are watching those who did not.”

Tax evasion is not an unheard of occurrence and represents a significant problem for the government, known as “the country of taxes,” many individuals find loopholes to skirt on their income tax. The Receita Federal has estimated they could lose up to R$55 million this year on taxes.

Foreigners living and working in Brazil are also filing taxes in Brazil, which may seem daunting especially with the language barrier. Under Brazilian law, all Brazilian citizens and residents who received an annual taxable income above R$24,556.65 in 2012 are required to file the Imposto de Renda Pessoa Física (IRPF – Personal Income Tax).

Read more (in Portuguese).

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