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Why You Shouldn’t Cheat On Your Taxes

Posted By Jim On 12/21/2010 @ 7:46 am In Taxes | 31 Comments

Have you ever been tempted to cheat on your taxes? [3] asks a recent article in the NYT’s You’re the Boss column. Like almost everyone else, I’ve been tempted (everyone has been tempted or thought about it… if you haven’t, then you’re a much better person than the majority!) but I’ve never cheated on my taxes.

Here are just three reasons why:

It’s Illegal

The first reason is the most obvious one, tax evasion is illegal. Remember Wesley Snipes? He’s in jail [4] right now for three years after being convicted for tax evasion.

How much would you pay to avoid being in prison? I don’t know about you but I’d happily pay my taxes to avoid jail.

It’s Not Profitable

Would you steal a dollar if you could keep only thirty five cents? What if you could only keep twenty five cents? Depending on your tax bracket [5], that’s exactly what you’re doing. When you fail to declare a dollar of income, you basically “get” a fraction of that. Even after you add in FICA and state taxes, you’re still getting only half of what you’re stealing. You take all of the risk but you only get half of the return… it’s simply not profitable.

Let’s say you play the numbers game… how many people evade taxes and aren’t caught? How many hours does it take to try to clear your name? Do the math and tell me whether it’s better for you to spend that time trying to earn more money or whether you should try to evade taxes on what you’ve already earned (let’s not even consider how much prison time you might get!).

It’s Bad for Society

When you don’t pay your taxes because of tax evasion, you’re basically stealing from everyone else who does pay taxes. You aren’t stealing from The Government or some amorphous entity that you can dehumanize. You are stealing from your neighbor. You are stealing from your parents. You are stealing from your children.

The rules are the rules and you pay what you owe. I’m glad to read stories like this [6] where people who fail to pay taxes are punished (Gary Barbera failed to pay $77,675 in taxes). He had to pay $119,744.55 in restitution and interest, a $30,000 fine, and three years of probation that included ankle-bracelet monitoring while on house arrest.

There are plenty of reasons why you shouldn’t cheat on your taxes, these were just three.

(Photo: alancleaver [7])


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[1] Tweet: http://twitter.com/share

[2] Email: mailto:?subject=http://www.bargaineering.com/articles/cheat-taxes.html

[3] Have you ever been tempted to cheat on your taxes?: http://boss.blogs.nytimes.com/2010/12/15/have-you-been-tempted-to-cheat-on-your-taxes/

[4] He’s in jail: http://www.torontosun.com/entertainment/celebrities/2010/12/09/16489011-wenn-story.html

[5] tax bracket: http://www.bargaineering.com/articles/federal-income-irs-tax-brackets.html

[6] read stories like this: http://www.nytimes.com/2010/12/16/business/smallbusiness/16sbiz.html

[7] alancleaver: http://www.flickr.com/photos/alancleaver/4122172006/sizes/o/

Thank you for reading!