Under reporting is a dangerous and illegal crime committed by public companies and individuals alike. The practice itself involves withholding money or information from the government that is legally required to be reported. When funds or income are deliberately under reported, the government loses an enormous amount of funds which in turn could have gone to Social Security, Medicare, and other governmental programs.

The method used for under reporting can vary significantly, but it primarily involves not reporting the correct amount of earnings to tax-collecting agencies or filing false documents that inflates deductions or misrepresents income.

The prevalence of under reporting increases as the economic situation deteriorates and as the cost of living rises. It is very common in countries where there is a lack of transparency as well as in areas of extreme poverty. In the United States, certain industries are particularly vulnerable to under reporting. For example, tax-sheltered businesses such as restaurants, dry cleaners, and landscapers may be prone to under reporting. Businesses of this type are seen as extremely profitable but are still subject to a variety of taxes that they may be tempted to avoid.

In addition to public companies, individuals can also be guilty of under reporting. As individuals, they may withhold information when filing their tax returns or they may declare inaccurate or falsely inflated expenses or deductions. It is important to be aware that under reporting is not only a criminal offense, but also one that carries serious fiscal penalties.

Those caught under reporting may face civil penalties, criminal charges, and in some cases, indictment. Depending on the magnitude of the crime, an individual could receive fines, a jail sentence, or the loss of their corporate status.

Overall, under reporting is a dangerous crime that has serious consequences both for those committing it and for society as a whole. It is a form of financial fraud that steals billions of dollars from the government and adversely impacts funding for social security, Medicare, and other programs. It is therefore crucial to ensure that earnings are declared accurately and that taxes are filed promptly and truthfully in order to uphold the integrity of the taxation system.