How big a deal is tax evasion?

[AGDee]

Originally Posted by preciousjeni

Paying throughout the year just doesn't make sense to me. Why won't the IRS let us pay once and keep our money during the year? Heck, they'd get even MORE money from a lot of people if they did that.

There are people who love getting a huge refund at the end of the year. I guess if I learned anything from my ex-husband accountant, it's that it is better to have as much of your cash as possible throughout the year and try to break even with the IRS at the end of the year. I generally calculate this out very carefully so I get the most take home pay possible without owing at the end of the year. The state just got me this year with the tax law change, which I could not anticipate. Most years, I get an IRS refund of about $30.

[PeppyGPhiB]

WTF is up with all of these politicians getting busted for not paying taxes? Two withdrawls this morning because of it. Not paying unemployment taxes on your two nannies and personal assistant? I guess politicians are the ones we hear getting busted on these things because poor folks sure can't afford in-home "help." But there's no excuse for these people having so many issues with paying their taxes - they can afford supurb accountants that can certainly handle things like taxes for people they employ in their homes.

[KSigkid]

Originally Posted by AGDee

There are people who love getting a huge refund at the end of the year. I guess if I learned anything from my ex-husband accountant, it's that it is better to have as much of your cash as possible throughout the year and try to break even with the IRS at the end of the year.

Exactly - again, I'm no tax or financial expert, but looking at the time value of money, a dollar today is worth more than a dollar at refund time. If you can invest it wisely, you come out ahead of the game.

[preciousjeni]

Originally Posted by KSigkid

looking at the time value of money, a dollar today is worth more than a dollar at refund time. If you can invest it wisely, you come out ahead of the game.

Absolutely - and too many people don't realize this.

[KSigkid]

Originally Posted by preciousjeni

Absolutely - and too many people don't realize this.

I think a lot of (maybe most) people have a poor concept of the time/money element. In other words, they think they need money now, and are unable to budget or adjust their budget to take advantage of long-term thinking. It's why people put all of their money in their checking account instead of putting some in savings, or investing some of it. They assume that they'll need it all at some point. That's probably just a long way of saying that people don't know how to budget properly, for the short or long-term.

Plus, it's kind of a weird concept; I'll be honest, I didn't know a whole lot about it until I took my Federal Income Tax class.

[AGDee]

If you spell it outright for some people, you can get them to understand. Say they are getting a $2000 refund and are going to pay off a credit card that has eeked up to $2000 over the year with that tax money. You can point out that if they had less withheld the whole year, they wouldn't have had to use that credit card at all and wouldn't have had to pay that interest!

[preciousjeni]

Originally Posted by KSigkid

I think a lot of (maybe most) people have a poor concept of the time/money element. In other words, they think they need money now, and are unable to budget or adjust their budget to take advantage of long-term thinking. It's why people put all of their money in their checking account instead of putting some in savings, or investing some of it. They assume that they'll need it all at some point. That's probably just a long way of saying that people don't know how to budget properly, for the short or long-term.

Plus, it's kind of a weird concept; I'll be honest, I didn't know a whole lot about it until I took my Federal Income Tax class.

I was very fortunate to have grown up with someone (my father) who knew a lot about these matters. I now provide free budgeting sessions to people I know. It's incredible to me how a little knowledge changes things so drastically. I helped a coworker understand credit/credit card companies as well as how her 401k works. Unfortunately, it was too late to save her a lot of money, but she's digging herself out of the hole pretty quickly.

[AGDee]

Nancy Killefer withdrew her candidacy to be the first chief performance officer for the federal government on Tuesday, saying she didn't want her bungling of payroll taxes on her household help to become a distraction for the Obama administration.

Killefer was the second major nominee to withdraw. Within hours, former Sen. Tom Daschle also withdrew his nomination to be secretary of health and human services.

http://news.yahoo.com/s/ap/20090203/...obama_killefer

[KSigkid]

Originally Posted by AGDee

Nancy Killefer withdrew her candidacy to be the first chief performance officer for the federal government on Tuesday, saying she didn't want her bungling of payroll taxes on her household help to become a distraction for the Obama administration.

Killefer was the second major nominee to withdraw. Within hours, former Sen. Tom Daschle also withdrew his nomination to be secretary of health and human services.

http://news.yahoo.com/s/ap/20090203/...obama_killefer

That's too bad for Daschle - guess he'll have to make due with his lobbying gig at Alston & Bird.

[KSig RC]

Originally Posted by KSigkid

Exactly - again, I'm no tax or financial expert, but looking at the time value of money, a dollar today is worth more than a dollar at refund time. If you can invest it wisely, you come out ahead of the game.

This is only true in the abstract.

If the inflationary/investment consequences of having the money are lower than the "other" consequences (i.e. spending more of it instead of actually utilizing the cash flow for positive results) then the marginal difference likely disappears, and may actually go negative.

When you look at the usual rate of spending/saving versus who the people are who luuuurrrve the huge refund, there might just be a massive overlap too.

Back to the OP - look, I'm all for excusing minor imperfections if someone is legitimately the only person for a job. Indeed, this is actually kind of closer to the ideal of the 'citizen legislator' - he's doing what many citizens do. However, this seems very much premeditated, and solved in the most expedient fashion to get nominated. Were the other choices that far behind that credibility could just be pissed away? I can't imagine they were.

[KSigkid]

Originally Posted by KSig RC

This is only true in the abstract.

If the inflationary/investment consequences of having the money are lower than the "other" consequences (i.e. spending more of it instead of actually utilizing the cash flow for positive results) then the marginal difference likely disappears, and may actually go negative.

When you look at the usual rate of spending/saving versus who the people are who luuuurrrve the huge refund, there might just be a massive overlap too.

I'll agree with that - I was being pretty general in my comment, and, as with anything, it's not such an easy issue.

Plus...honestly, my liberal arts educated-mind probably couldn't wrap itself around anyting more complex than that.

[UGAalum94]

I think a lot of us who like getting refunds lack the self discipline to save unless they are basically compelled to through withholding. (compelled is too strong since you could adjust deductions or whatever, but if you're kind of paying it safe since you don't want to run the risk of owing. . .) And I think KSigRC is completely right about rates of spending and savings in this group if I'm at all typical.

And I agree about citizen legislators. I wouldn't want an imperfect tax record to be a disqualifying trait in itself, but at some point it starts to seem as if some of the very folks who want others to pay for programs are unwilling to make comparable sacrifices themselves.

It also bothers me more in some of the recent cases when it seems that the income and lifestyle elements that create the tax "complications" are unlikely to be issues faced by the majority of tax payers: household staff, paid drivers, resort property. Sure, these may be common in the highest brackets, but I think it's fundamentally less sympathetic than relatively assessments based on miscalculations with self employment or late payments that were paid before a high profile appointment or run for office was attempted.

[RU OX Alum]

Originally Posted by DSTRen13

I work for an accounting agency. I can't really say details - confidentiality and all that - but I will say that IRS agents can and sometimes do carry guns ... you really don't want to get on their bad side.

I work in accounting and I can't say that I blame them.

ETA: If you are going to be sec. of commerence or sec. of the treasury though, everything should be in order

I have absolutely no faith in Obama's cabinet.