Final answer:
Reporting information regarding passive income is not an example of tax fraud, whereas the other options like using a false SSN, keeping two sets of books, or claiming false dependents are typical examples of fraudulent activities. so the correct answer is option C.
Step-by-step explanation:
The question addresses which of the following is not an example of tax fraud: a) using a false SS#, b) keeping 2 sets of books, c) reporting info regarding passive income, d) claiming a blind spouse as a dependent when you are single. Tax fraud typically involves deliberate actions to evade tax laws, such as underreporting income, falsifying deductions, or using a fraudulent social security number.
Hence, the correct answer is c) reporting info regarding passive income, as this is a legal requirement for tax purposes and does not constitute fraud when done correctly and honestly.
Examples of tax fraud include using a false Social Security number (SSN), maintaining two sets of books to conceal the true financial status of a business, or falsifying personal details to claim deductions or credits for which the taxpayer is not eligible, such as claiming a nonexistent blind spouse as a dependent. Following proper tax reporting procedures, which includes accurately reporting passive income, is a legal obligation and does not fall under the category of tax fraud.