There are several reasons why businesses might choose to underreport their income:
Tax Savings: The primary motivation is often to save money on taxes. By reporting less income, businesses can lower their taxable income and consequently their tax bill. Cash Flow Management: Some businesses might underreport income to manage their cash flow better, keeping more cash in hand for operations. Competitive Advantage: Businesses might underreport income to appear less profitable to competitors, thereby gaining a strategic edge.