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[quote=Anonymous][quote=Anonymous][quote=Anonymous]The Manafort and Cohen types were what came to mind when I read the subject line and opened the thread.  I wonder how common it is for non-W2 folks to omit income from their tax returns or outright lie (i.e. inflate cost basis or other deductions).[/quote]

That's a tough question to answer. Due to the complexity of US Tax law, a lot comes down to "treatment". Things like cost basis, deductions, and etc, often exist on a continuum rather than black/white. A position is often described in terms of conservative or aggressive. A conservative treatment is one that has low audit risk and IRS will almost certainly agree with the treatment if audited. An aggressive position is one that has a higher likelihood of being audited, or higher chance of IRS disagreeing if audited. Higher chance doesn't mean 100% chance, which is why some may choose to take an aggressive position. But is it illegal? Again it depends, because there is a chance that IRS could audit it and decide that it's okay. [/quote]

I'm talking about flat out lying.  For example, brokerage firms used to not track/report the cost basis for securities so one could basically make up their original purchase price.  Another example would be buying new carpet for your house and claiming it as a deduction against a rental property as a repair.[/quote]

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