Reply to For those of you cheat on your tax return...

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Perhaps you don't realize this but it is very difficult for wage earners to cheat on their taxes in a material way.  Almost all of your income is going to be reported to the IRS (i.e. W-2, 1099, etc.) so there is very little tax evasion in this income group.  Brokerages track the basis for securities now so that one loophole has mostly been closed unless you've owned securities for a very long time.

The vast majority of tax evasion comes from the 1%.[/quote]

Perhaps you don't realize this but cheating is very common among those paying low/ no taxes. Think about all those tips or cash transactions. Think about highly-questionable benefits or child credits. That's a huge pot of money the IRS could well go after.[/quote]

1) They already go after this group the most.
https://www.cbsnews.com/news/where-does-the-irs-audit-the-most-poor-rural-counties-that-are-mostly-black/

2) Refundable credits like the EITC and the CTC are the most scrutinized at the IRS, and are the easiest to audit.

3) The money from these audits is not a lot bc these people don’t have a lot. Audits of wealthier people result in more tax even with the increased costs.[/quote]

1) Not true, not even by a mile (and the report in the very link you provided shows why)

2) Easiest to audit: Yes. Most scrutinized: not by a mile

3) You don't understand volume. 20 million people x $500 = $10 billion in easy-to-get tax dollars. That's more than fighting 10 billionaires to death and getting $500M from each -- which rarely ever happens to begin with.[/quote]

Exactly.  The % of rich people who get audited is higher than poorer wage earners, but there aren't that many rich people, comparatively.  The 1% has their returns done by an accountant, which means it's on the accountant to justify the return, unless the IRS or the accountant can prove that the person being audited gave the accountant false information.  It's expensive to deal with the rich person's accountant and lawyer (if things get serious).  It's much easier to send computer generated letters to millions of waitresses and hair dressers and hope they each cough up a small amount of money.  There's no way the bill would have scored $200 billion in extra tax revenue from compliance if they were only going after rich people and spending the money on "customer service."

In addition to people in cash businesses, the people who should be worried right now are those who did the WFH thing during covid and deducted "office" expenses.  Huge audit red flag.  [/quote]

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