Tax fraud is the illegal act of intentionally falsifying information on a tax return to reduce tax liability or avoid paying taxes altogether. This can include underreporting income, inflating deductions, or hiding money in offshore accounts. Tax fraud is a serious crime that can lead to significant penalties, including fines and imprisonment. Governments, such as the Internal Revenue Service (IRS) in the United States, actively investigate and prosecute tax fraud cases. Individuals and businesses found guilty of tax fraud may face audits, financial penalties, and legal consequences, emphasizing the importance of accurate and honest tax reporting.