How big a deal is tax evasion?

[preciousjeni]

Originally Posted by AOII Angel

From the standpoint of someone who now pays A LOT of taxes, it's not always so black and white. My taxes are fairly simple since I don't claim lots of deductions or have multiple sources of income. However, I don't receive a W2 anymore. Determining my taxable income is easy since I only have one source, but for others, they often do the best they can. Tax codes are complex. I rely completely on my accountant to keep me in line with regulations. I could easily miss something that I would have no clue was taxable! They don't charge penalties for these "oops" evasions because they give people the benefit of the doubt that an error was not deliberate. If you do your taxes on a 1040EZ, you have no concept of how complicated taxes can be!

We're speaking more of those who intentionally do not pay. I cannot file my taxes on a 1040EZ. I also itemize because the standard deductions are never adequate. I still pay all of my taxes.

[AOII Angel]

Originally Posted by preciousjeni

We're speaking more of those who intentionally do not pay. I cannot file my taxes on a 1040EZ. I also itemize because the standard deductions are never adequate. I still pay all of my taxes.

They are also talking about people who claim that they didn't intentionally not pay, ie. Daschle and Geithner. People who deliberately evade their taxes clearly wouldn't be up for cabinet positions.

[preciousjeni]

Originally Posted by AOII Angel

They are also talking about people who claim that they didn't intentionally not pay, ie. Daschle and Geithner. People who deliberately evade their taxes clearly wouldn't be up for cabinet positions.

Riiiight.

[AOII Angel]

Originally Posted by preciousjeni

Riiiight.

I just choose not to be so cynical about it. Just because Daschle is a Senator doesn't mean he has the code memorized inside and out. The real problem with tax evasion is at much higher levels than Daschle. Major corporations get away with paying essentially no taxes...and they do it intentionally. Oh my GOD! Daschle forgot to claim a car service....the few thousand the government is owed from that pales in comparison to the millions evaded by corporations!

[preciousjeni]

Originally Posted by AOII Angel

Major corporations get away with paying essentially no taxes...and they do it intentionally...Daschle forgot to claim a car service....the few thousand the government is owed from that pales in comparison to the millions evaded by corporations!

True, but then again we tax our business within an inch of their lives. It's not surprising that they would seek loopholes or opt out of paying when possible.

I'm afraid I have people like this in my family. They will take tax avoidance to the legal limit and then move into tax evasion if necessary. When you're talking about millions of dollars, it's worth keeping the money a little extra longer to make even more money on it. The penalties (if you have to pay) don't outweigh the benefits.

[AOII Angel]

Originally Posted by preciousjeni

True, but then again we tax our business within an inch of their lives. It's not surprising that they would seek loopholes or opt out of paying when possible.

I'm afraid I have people like this in my family. They will take tax avoidance to the legal limit and then move into tax evasion if necessary. When you're talking about millions of dollars, it's worth keeping the money a little extra longer to make even more money on it. The penalties (if you have to pay) don't outweigh the benefits.

Actually, if you look at corporate taxes world wide, the US has one of the lowest rates. Many of the corporations pay NO taxes. Actually using all of the deductions that you are allowed is legal and expected. I'm not saying that there aren't a lot of people who push the limits, but this will never be remedied until we simplify the tax code. There are a lot of vague statutes of which people take advantage! I pay my taxes and actually take a lot fewer deductions than my accountant tries to push. I just don't feel comfortable fudging...there is much permissible fudging in tax preparation!

[preciousjeni]

Originally Posted by AOII Angel

Actually, if you look at corporate taxes world wide, the US has one of the lowest rates.

We're among the top five in terms of high corporate tax rates worldwide. Last year, I believe we were even in the top three!

[KSigkid]

Originally Posted by preciousjeni

True, but then again we tax our business within an inch of their lives. It's not surprising that they would seek loopholes or opt out of paying when possible.
I'm afraid I have people like this in my family. They will take tax avoidance to the legal limit and then move into tax evasion if necessary. When you're talking about millions of dollars, it's worth keeping the money a little extra longer to make even more money on it. The penalties (if you have to pay) don't outweigh the benefits.

See, I have no problem with people finding "loopholes." If there are loopholes in the tax code, which there are, more power to the people who can take advantage of them.

I'm no expert on the subject; I've only taken one federal income tax class in law school (albeit with a guy who's a world-renowned expert on taxation), but my view is that I'm willing to cut more slack to the less sophisticated tax payer, or the individual with less income. People with more income can afford to hire more intelligent accountants, and don't really have an excuse for using sketchy tax people or pleading ignorance.

That said; the tax code is a HUGE and complicated piece of information, which is probably part of the problem.