For example, the tax office also knows about eBay transactions. picture alliance / dpa topic service | Robert Guenther
To catch tax fraudsters, tax offices use different methods.
For example, they carry out tax audits, follow up on anonymous tips or carry out their own research, as the “Handelsblatt” reports.
It is also becoming increasingly difficult for fraudsters to hide money abroad. Because the tax office exchanges account information with 119 other countries, the report says.
Tax revenue is of utmost importance for the stability of a state. For this reason, tax offices are constantly faced with the challenge of finding out about tax fraudsters. In 2022 alone, around 45,000 criminal proceedings were initiated nationwide for tax crimes, such as Figures from the Federal Statistical Office (Destatis). A report by “Handelsblatt„.
Tax offices use these ten methods to detect tax evasion
Basically, every tax return goes through the electronic risk management system, the report says. During this process, software compares the declaration with control material and then evaluates it. However, which control material the tax offices use for this varies from individual case to individual case. The following ten options will help authorities obtain relevant information.
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1. The tax office checks the social security information that is reported directly by the employer.
Since employers send their employees’ salaries and social security contributions directly to the tax office, incorrect information in the associated tax return is quickly noticed. Even if taxpayers only submit a tax return years later, the corresponding control system works, according to the “Handelsblatt”. This also applies in the case of pension money.
2. Audits provide more clarity.
The tax office carries out regular audits to check company data such as the amount of wages, income and expenses. It then checks whether the company’s expenses can be found as income by the recipient. The plausibility of the company books is also checked through internal comparisons with previous years and external comparisons with the industry average. The check also includes cash and travel books as well as expense reports.
3. Whistleblowers help the tax office uncover tax fraud.
It is possible to report suspected cases of tax fraud anonymously to the tax offices. According to “Handelsblatt” information, this is also possible in Baden-Württemberg via a digital whistleblower portal. These whistleblower tips can help uncover cases of fraud.
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4. Notaries are an important source of information for the tax office.
Notaries are obliged to inform the tax office about real estate transactions and the people involved. This gives the authority clarity about income, inheritance or real estate transfer tax for German citizens.
5. If there is a specific reason, account inquiries are legitimate.
Tax offices are entitled to circumvent banking secrecy in order to investigate a tax crime. In principle, you have the right to inquire about accounts – even for private individuals. However, there must be a specific reason for this, for example an anonymous tip. With the help of the account query, the tax office receives information about the account balance and sales development of a suspicious person.
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6. Tax liabilities arise after the death of a taxpayer.
After the death of a taxable person, banking secrecy also expires. The banks are then obliged to send the tax office a control report about the deceased’s account balance, according to the “Handelsblatt”. This allows the tax office to find out whether the person committed tax crimes during their lifetime. Covering up these crimes by heirs could also raise criminal law problems, the report said.
7. The tax office exchanges account information with other countries.
Hiding money abroad is becoming increasingly difficult for fraudsters because Germany exchanges account information with 119 countries. Until July 31st Every year, foreign financial institutions must report the account balances of their German customers to the Federal Central Tax Office, reports the “Handelsblatt”. This data is therefore also available to the tax office.
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8. The tax office receives data from providers such as eBay and Airbnb.
The tax office is also aware of your profits from platforms such as Ebay, Airbnb and Vinted. The providers have to report the transaction data to the tax authorities once a year. If you do not declare your winnings in your tax return, you could potentially get into trouble for attempted tax evasion.
9. The tax office can send a collective information request to companies in order to receive transaction data.
The tax office did this, for example, in the case of the crypto exchange Bitcoin.de, as the “Handelsblatt” reports. It is currently being checked whether the approximately 4,000 Bitcoin traders are taxing their income correctly.
10. The tax office conducts its own research into possible tax evasion.
In addition to the methods mentioned above for obtaining information, the tax offices also rely on their own research. For example, they check who offers services online for illegal money or makes commercial sales.
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