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]

+1 op clearly has no idea what they are talking about. Banks, brokerage houses and employees report income directly to the IRS so if something doesn’t tie out, there’s a notice. It’s very hard to find ‘loopholes’.

[/quote]

You've never met self-employed people who deduct their whole life?  Or get paid partially in cash?[/quote]

Where little business is happening with cash these days so I doubt if that can't be tracked. [/quote]

It's harder these days to avoid being tracked than you think.  Even if you keep all your money under your mattress and pay for everything in cash, the people you're dealing with probably have a bank. You buy a car and pay cash, the seller is probably going to deposit that $$ in a bank. Same if you buy a house or pay rent.  If it's over $10,000, the bank reports that transaction to the IRS.  When the person who made the deposit gets audited (and they will if, for example, the car dealer is making a bunch of cash deposits), they ask where the $$ came from.  When the computer spits out multiple reports of big cash transactions from someone with zero income, they audit.  If they catch you making lots of smaller deposits to get around the $10k reporting threshold, that's called "structuring" and they'll nail you for that.

I think the IRS isn't entirely lying when they say they're going to use a significant portion of the money on IT.  But it's not to audit rich people, it's to track more of these smaller transactions on computer and generate automatic audits for the little guys. [/quote]

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