A corporate compliance is used to identify and prevent violations of law by the communities, employees, lenders, investors, officers, agents, directors of a business and financial markets. Most corporate fraud investigations are joint efforts involving many federal agencies. Corporate compliance helps in having a strong corporate management philosophy.
Among the penalties which apply to organizations are: imprisonment, Payback taxes with interests, fines, restitution, sanctions, forfeits lands/homes/vehicles/certain artwork, corporate probation etc.
The IRS Act made provisions in the law, which holds corporate officers accountable for the content of their corporation’s income tax returns, financial statements, and their conduct relating to the manipulation of corporate records. The Act imposes stiffer sentences of up to 20 years in prison for the destruction, alteration or falsification of records in order to impede federal investigations and bankruptcies.
Corporate compliance may be due to:
- Tax evasion -illegally avoiding paying taxes, failing to report, or reporting inaccurately.
- Embezzlement – dishonestly appropriating or secreting assets.
- Maintaining accounts at two different banks but only reporting only one of the accounts to the IRS.
- Mail fraud