Some lifestyle changes that may indicate fraud and unreported income

Published: 2019-05-14 07:52:19
578 words
2 pages
5 min to read
letter-mark
B
letter
University/College: 
Type of paper: 
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

In normal circumstances, people start their lives living humbly. With time and increase in income, they change their lifestyle and class depending on the level of employment or income they are. As life progress and people become more experienced in life, they aim to improve their standards of live and increase their income. In some cases, people who have lived a good honest life participate in unlawful or fraudulent ways to increase their income and change their lifestyle. Cases of fraud, unreported income, and money kept in foreign secret accounts are common.

Both civil and criminal cases often involve proving or disproving income of an individual or business. Divorce cases often have allegations of hidden income or assets. Court disputes alleging loss of sales or profits require an accurate income to be determinedCITATION Tra10 \l 1033 (Coenen). Lifestyle changes include tax-related issues, such as failing to submit taxes or finding out how much was earned and not taxed. White collar crimes and drug trafficking may be indicators of hidden incomes, and legal/illegal activities may generate income that ends up being kept or hidden in other countries. The government may need to find out whether such unreported income and activities are legal or fraudulently acquired.

Forensic accountants or fraud investigators are experts who trace back books and records to prove income. In some cases, books or records are not available, may be since they got lost, were destroyed or transacted as cash only. In cases where unrecorded or unreported cash income is alleged to have been received, government agents and defense counsel use the Lifestyle Analysis or expenditures method to prove/disprove legal or illegal income, whether reported or unrecordedCITATION Tra10 \l 1033 (Coenen). Life Analysis entails considering a persons expenditure such as mortgage, groceries, lease or loan and insurance, comparing it with his/her sources of income such as wages, stocks, bank loan and family income. If the expenditure is more than income, then that may mean there are hidden incomes, which enable the person to live the way he/she does.

When a person earning an average income suddenly starts buying cars, large businesses and properties, taking luxurious vacations, and living a lavish life that requires money, the lifestyle becomes questionable. Unless there is a new source of income, investments, or donations/funds, then unexplained promotion or source of income becomes questionable. Huge amounts of income achieved within a day or week may be a sign of either quick money received fraudulently through stealing or conning, dealing with counterfeit drugs or donations/gifts. Checking banking slips against money in accounts may help find out about bank account income and expenditure.

In conclusion, lifestyle changes may indicate fraud and unreported income, tax evasion, white-collar crimes, drug trafficking, illegal activities income, and keeping unaccounted money in foreign accounts. Government agents and defense counsel use the Lifestyle Analysis or Expenditures method to prove if income is legal or illegal. Forensic accountants and fraud investigators can follow up unrecorded income to establish whether it was legal or illegal. A sudden change in a persons daily lifestyle may be a cause for concern if he/she spends too much or lives an expensive life that is above his/her known income. Criminal, civil, divorce and business disputes all have an element of money hidden or taken away from someone else.

Works Cited

BIBLIOGRAPHY Coenen, Tracy. Lifestyle Analysis in criminal cases: Proving Income without full documentation. 28 February 2010. 17 April 2015 <www.sequenceinc.com/fraudfiles/2012/02/lifestyle-analysis-in-criminal-cases-proving-income-without-full-documents>.

sheldon

Request Removal

If you are the original author of this essay and no longer wish to have it published on the SpeedyPaper website, please click below to request its removal: