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People tip off for a number of reasons. To be completely honest, most people don't snitch on others because they are good people and are appalled by someone's skirting of the system. The number 1 reason for snitches is easily that someone was a jerk to the snitch. Number 2, self protection from someone that was involved but didn't want to be. Between those two you've got 90% of the cases.
The other issue depends on the type of tax cheated. Some taxes are easy to prove out. The employee who gets their W-2 late, may have an employer that never paid the taxes supposed to be withheld. That hurts the employee at the benefit of the at-fault party, so snitching is more likely. The waiter that doesn't report 100% of their cash tips....nobody has a vested interest in reporting that. The forensics to prove out where the money came and went will be more expensive than the benefit to the IRS.
As the economy moves more towards electronic transactions for everything, cheating on taxes will become more and more difficult. Hence, there's a great deal of investment in creating legal loopholes. Did you sell something overseas? You're supposed to pay tax. Did the money not get back to the US....well, then maybe you don't. (Why Apple has $200B in cash yet borrows to pay dividends).
How about a self-employed person who has a small business. They pay SE Tax and Income Tax. However, if they sell the company to a profit-sharing trust and run it as an ESOP corporation....they pay neither one. Or, there's plenty that will put their self-insured plan in a tax free zone and show the profits from there.
It's whether or not you're big enough to pay for the infrastructure for effective tax planning.
The flip side of the coin is that the authorities have their games to play as well. Using the IRS to bust Capone is a masterful headline. Using the IRS to bust old grandmas that sell homemade cookies is an embarrassment.
And hopefully the IRS stays fair. The CA BOE likes to use the full extent of their teeth and frankly, IMO, conducts punitive audits, with the full extent of guilty until proven innocent. For that manner, someone would have to be fairly heinous for me to report them to the BOE. I'd be more willing to do so to the IRS.
Lots of stuff to consider when you enter the snitching game. Most people wisely avoid it.
You have basically described how the building permit division operates in most jurisdictions. The vast majority of calls are from "junior high school folks" that have an axe to grind. The gal manning the hotline in my area was appalled at how petty people can be.
It is not my place to mess with another person's life. If they were a killer or robber, sure, but I am not going to stoop so low as to turn in someone who doesn't pay a few bucks owed on taxes. Not my circus, not my monkey.
After all, when our President doesn't pay a penny in taxes because he is "smart", why should someone who pays some, but not all, of their taxes be taken to task ?
The IRS is too swamped to really go after people anyway. The odds are like 10% and of those people, the vast majority will claim a mistake and just pay the penalty. It'd have to be egregious and past the time to fix. Let's say you narc someone for working off the books, they have a few years to amend so they aren't going to get into trouble, just a fine.
No sense in getting bad karma for nothing. You might feel good about "getting them" until you see nothing happens and people figure out you're a narc and come back for you.
That link you provided shows that you have to have credible evidence. You can't just say mr X works for cash every summer or Miss Y babysits 5 kids. Most people don't have evidence that doesn't require a time investment that the irs isn't going to pursue for a little amount.
The previous owner of our home rented it out to a family that apparently rarely paid their bills. We got collection calls for years after we moved in even though it was our phone number (I guess it was linked to the address). One day a man called and identified himself as from the IRS. I told him we weren't the so-and-so's and that I didn't know where they moved to, but I did know Mr. So-and-so's father and gave his name and address to the IRS guy.
It has been ten years and we still get random mail, past-due notices... for them.
The IRS doesn't call you, they write. Scammers pretend to be the irs.
Yup. Dropped a letter on the scumbag who was ripping off my aunt's money. Scumbag had gotten guardianship and POA and no one believed she was a thief and/or wouldn't do anything. So I sent the IRS after her - she wasn't gonna declare all the $$ she stole, right?
That money would be explained as gifts and wouldn't be subjected to taxes unless over a certain amount in which case, your aunt would be responsible.
Only if I had a great need for personal revenge...a husband who screwed me in the property settlement, a relative who stole something from me, or whatever.
Other than that...no. Most people who are upper middle class, and certainly the wealthy, are all tax cheats to some degree. Fibbing on the amount of charitable gifts, the distances traveled for business deductions, etc.
Only if I had a great need for personal revenge...a husband who screwed me in the property settlement, a relative who stole something from me, or whatever.
Other than that...no. Most people who are upper middle class, and certainly the wealthy, are all tax cheats to some degree. Fibbing on the amount of charitable gifts, the distances traveled for business deductions, etc.
I prefer to mind my own business.
That's quite a broad brush you're painting with there. While it may be true of you and your acquaintances, it most certainly isn't universally true.
Nope. High percentage of congressmen and senators cheat. Ask Obama. His pick for treasury Secretary owed over $30,000.
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