Simple English definitions for legal terms
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A sham transaction is a fake or illegal deal that doesn't really happen in real life. Sometimes people make these fake deals to avoid paying taxes or trick others. But if a sham transaction is discovered, it can be cancelled by a court because it's not real.
A sham transaction is a type of transaction that is either illegal or fake. Transactions that are fake or illusory, meaning they exist only on paper and have no real-world consequences, can be voided by a court of law. This is especially true if the transaction is used as a way to deceive or avoid taxes.
These examples illustrate how sham transactions can be used to deceive or avoid taxes. In each case, the transaction is not a legitimate business transaction, but rather a way to manipulate the system for personal gain. Courts can void these transactions and impose penalties on those who engage in them.