I hate paying income taxes. Who doesn’t?
With the April 15 filing deadline looming, I think of the huge chunk of my income that goes to Uncle Sam.
As a single dad, I could use that money to pay bills and afford a few extras.
The IRS wouldn’t notice if I cheated just a little on my incomes taxes, would it? Surely, I need the money more than federal government. Certainly I could get away with not reporting all my income, right?
Don’t bet on it.
“It’s not just wealthy Americans with fancy Swiss bank accounts who are at risk of being investigated by the IRS,” writes tax specialist Michael Rozbruch. “Far from it. … Highly sophisticated computers are combing through returns to figure out which ones would be the best to have IRS agents audit.”
Individual taxpayers like you and me account for 75 percent of cheating, according to the legal website nolo.com
“Most people cheat by deliberately underreporting income,” the site says. “Auditors are trained to look for tax fraud – that dark area beyond honest mistakes.”
A few tax schemes
Fudging on your income isn’t the only way people try to cheat the IRS. Other tactics include creating a fictitious dependent, overstating the amount you give to charity, and deducting too many expenses for a home office, according to an Esquire article.
A suspicious tax return could prompt a very unpleasant IRS audit.
“The thing about an audit by the Internal Revenue Service is this: It’s nothing like being arrested, where you’re innocent until proven guilty,” writes Chris Ladd in Esquire. “It’s just the opposite. When the IRS comes a-knocking, you’re guilty until you can prove yourself innocent.”
What are the penalties for tax fraud?
The law is complex, but individuals convicted of fraud could face up to five years in prison and a $250,000 fine, according to the IRS website.
The IRS has one of the highest conviction rates in federal law enforcement, the site says.
“Not only do the courts hand down substantial prison sentences, but those convicted must also pay fines, civil taxes and penalties,” it continues.
Bottom line: The possibility of saving taxes by committing fraud isn’t worth the risk of a huge penalty and even prison time.
It’s not surprising that you’d consider cheating on your taxes. But don’t succumb to the temptation. You could make your financial situation far worse if you’re caught. Both you and your kids could suffer greatly.