[2Gkashmiri]

Taxes work on "self assessment" basis meaning you, the taxpayer have the burden to declare all facts relevant to assessment of your tax and you pay the tax.

Then, sometimes your case is picked for audit and then they check if what you declared is correct as per applicable laws or not.

See, here is a small mom and pop shop... who owns that? Is the premises on rent? How much ? Is the rent deed valid and proper? Maybe you are paying less rent than declaring? Are you actually employing people you say you are? Are you paying them exactly you say you are paying?

How would you ensure that fact db is not having funny data ?

Say i am saying i am paying 100 bucks a week for fuel but fact is, my shop is next door to my home and i am just pocketing this cash daily. If i keep putting this 100 bucks weekly expense in this factdb, how will govt know.that i am not lying?

[wredcoll]

That's how they work now in america. They don't have to.

As for fraud, the same way they check for lies now, cross reference reports and then audit.

[dawnerd]

It’s my understanding that they have expected ranges certain things should be within that’s considered normal and anything outside of that puts a higher risk of an audit or simple manual review/adjustment.

[cxr]

You're moving the goalposts; the purpose would be reducing toil (and possibly other costs) for the people who are currently tasked with filling out these types of forms.

There's nothing in the comment you're responding to that suggests that it's instead meant to be a solution to the problem of the government (or any other org) being unable to trust the inputs to its systems or ameliorate the costs of bad actors at all.

A person entering lies in their personal fact database tomorrow can submit the same lies on their personal income tax return today.