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Thread: Rats! City to Pay for Informing on Tax Cheats

  1. #11
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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by vvx View Post
    I would think they're more after people who don't pay tax at all rather than those making up questionable deductions. From the article "It would probably be ... a business knowing that a competitor is not remitting a tax." So for example a business collecting sales tax and not sending it in. Perhaps by not reporting all of their sales, etc...
    And, at the end of the day, all they're going to do is an audit. That's all. Depending on the kind of business, the monthly tax reports are going to be made. You can't really cheat on sales tax, unless you make cash sales that aren't registered anywhere. You can't cheat on payroll taxes, either, trust me, I've tried. It can't be done.

    As far as the cost being more than their gains - collecting tax is nothing new to the IRS or the states. The concept of cost/benefit is not lost upon them. They're clearly not going to conduct massive audits of everyone reported through this program. Rather, they would focus their efforts where they expect the greatest payout. This just helps them identify that easier.
    Therein lies the problem. Are we going to go after businesses, purely on the say-so of another person? Audits cost money. They cost the government money and they cost the citizens money. What will we create, when Joe the Grocer is fingered by who-the-hell-ever as a tax cheat, gets audited and is found to have perfect taxes? The government spent money for nothing and Joe the Grocer was forced to spend money for nothing, on the word of who-the-hell-ever. At the end of the day, Joe has a nice, fat, juicy lawsuit against the government and the clown that invaded his privacy and wrongfully accused him of tax evasion; again, costing more money.

    The $64,000 is: will the effort be worth the return? IMO, there's no way.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

  2. #12
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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by apdst View Post
    And, at the end of the day, all they're going to do is an audit. That's all.
    You know that tax evasion is a criminal act, right? It's not "just an audit."


    Depending on the kind of business, the monthly tax reports are going to be made. You can't really cheat on sales tax, unless you make cash sales that aren't registered anywhere.
    Yes, that's exactly how you cheat on the sales tax. You say this as if it's uncommon, when in reality it's how the vast majority of cash businesses that cheat on their taxes manage to do so.

    You can't cheat on payroll taxes, either, trust me, I've tried. It can't be done.
    Did you ever think of paying your employees under the table? That's a quick and easy way to cheat on payroll taxes.

    Therein lies the problem. Are we going to go after businesses, purely on the say-so of another person? Audits cost money. They cost the government money and they cost the citizens money. What will we create, when Joe the Grocer is fingered by who-the-hell-ever as a tax cheat, gets audited and is found to have perfect taxes? The government spent money for nothing and Joe the Grocer was forced to spend money for nothing, on the word of who-the-hell-ever.
    Again, you seem to be assuming that the government will begin a massive investigation into someone based only on an anonymous tip. I think the program is a bit more nuanced than that.

    At the end of the day, Joe has a nice, fat, juicy lawsuit against the government and the clown that invaded his privacy and wrongfully accused him of tax evasion; again, costing more money.
    And you're basing this on...?
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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by RightinNYC View Post
    You can create labels to describe the distinctions all you want, but the fact remains that there are tax practices that are acceptable (i.e. legal) and those that are not (i.e. illegal). If someone is paying his employees under the table, that's obviously illegal. If someone is operating a cash business and underreporting their sales, that's obviously illegal.
    And, if he gets audited, he'll have to account for that money. If he didn't do a good job of hiding it, then he's going to simply pay the amount, plus penalties and interest. And, you know what? Then, the IRS is coming for the employee. So, this sorta thing must be thought through very carefully, because it might end up hurting all the wrong people. Ultiamtely, what's, "illegal", and what the IRS can prove, are two different things.



    I'm curious as to what you're basing this on - how exactly would it "create lawsuits" other than your general feeling that this is bad and that all bad things lead to lawsuits? Who would be suing who? On what grounds?
    Unless I blabbed to the whole world that that I outright cheated on my taxes, how would someone know? Think about it. Look at the above post, when I talk about Joe the Grocer. Oh yeah, I can just see lawsuits popping up for unjustifiable audits. Audits are just like criminal charges, you can't do them without some kind of probable cause.



    And if your story is obviously not believable, such as if you're paying people under the table or underreporting sales by $300k, then nobody will believe you and you will go to jail.
    You won't go to jail. Growup! They'll just make you pay the money you owe them, plus interest and penalties. The IRS is made up of a bunch of pricks, but they're not stupid. They know that they can't get their money, if you're in jail and your business closes. And, you're only responsible for the sales that they can prove. The Constitution applies to the IRS, too. Believe it, or not.

    You seem to be under the impression that the purpose of this law is to get people to rat out their neighbors for taking a questionable $300 home office deduction. It's not.

    That's what it's going to lead to. Wait and see.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by RightinNYC View Post
    You know that tax evasion is a criminal act, right? It's not "just an audit."
    You know that they have to prove tax evasion, right?




    Yes, that's exactly how you cheat on the sales tax. You say this as if it's uncommon, when in reality it's how the vast majority of cash businesses that cheat on their taxes manage to do so.
    No ****! And, if there's no paper trail on the jack, guess what?



    Did you ever think of paying your employees under the table? That's a quick and easy way to cheat on payroll taxes.
    I never figured out where to hide the money.



    Again, you seem to be assuming that the government will begin a massive investigation into someone based only on an anonymous tip. I think the program is a bit more nuanced than that.
    Let us hope so!



    And you're basing this on...?

    It's called, "invasion of privacy". If you and your accountant are the only ones that see your books, then someone illegally snooped into your ****. It's unethical for an accountant to rat out a client.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

  5. #15
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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by apdst View Post
    And, if he gets audited, he'll have to account for that money. If he didn't do a good job of hiding it, then he's going to simply pay the amount, plus penalties and interest.
    Good point, nobody ever goes to jail for tax fraud.

    And, you know what? Then, the IRS is coming for the employee. So, this sorta thing must be thought through very carefully, because it might end up hurting all the wrong people.
    If a business owner is underreporting his sales, why would they go after the employees?

    Ultiamtely, what's, "illegal", and what the IRS can prove, are two different things.
    Of course. The problem is that you seem to think they're mutually exclusive.

    Unless I blabbed to the whole world that that I outright cheated on my taxes, how would someone know? Think about it.
    "Unless I blabbed to the whole world that I [committed X crime], how would someone know? Think about it." - Famous last words of innumerable prisoners who were convinced that they were smarter than they actually were.

    Use common sense - you don't think that anyone else could possibly find out that someone was paying his employees under the table or was cooking the books?

    Look at the above post, when I talk about Joe the Grocer. Oh yeah, I can just see lawsuits popping up for unjustifiable audits.
    I don't doubt that you can, but that's because you don't really understand the law and just assume that whenever anything bad happens, you can sue.

    Audits are just like criminal charges, you can't do them without some kind of probable cause.
    Link? Furthermore, who said they were going to?

    You won't go to jail. Growup! They'll just make you pay the money you owe them, plus interest and penalties.
    I just don't know what to say to this. There are approximately 3,000 prosecutions brought each year for federal tax evasion. That doesn't count the thousands more that brought in state court. Furthermore, the point of this push is not just to put people in jail - it's to deter others from underreporting.
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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by apdst View Post
    You know that they have to prove tax evasion, right?
    And they do it 3,000 times a year.

    No ****! And, if there's no paper trail on the jack, guess what?
    Then they don't bring charges. If there is, then they do. What's your point?

    I never figured out where to hide the money.
    It's called, "invasion of privacy". If you and your accountant are the only ones that see your books, then someone illegally snooped into your ****.
    Now you're just not being creative. I can think of a half dozen ways in which someone would legally come into possession of enough info to tip off the IRS.

    -Employee who handled the books and saw the underreporting
    -Employee who was getting paid under the table
    -Disgruntled spouse who came across the books
    -Competitor who found out from former employee that you were paying under the table

    It's unethical for an accountant to rat out a client.
    It's also unethical for an accountant to help you violate tax law. If they're willing to be unethical in that way to get your $2k payment each year, why would you think they'd hesitate to be unethical in this way to get 1/3 of your $500k in unreported sales taxx?
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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by RightinNYC View Post
    Good point, nobody ever goes to jail for tax fraud.
    Well, now you're talking about fraud. Big difference between fraud, evasion and cheating.



    If a business owner is underreporting his sales, why would they go after the employees?
    I didn't say anything about underreporting sales. I was referring to paying employees under the table. If the employer is paying his employees under the table, then the employees owe the government income taxes.



    Of course. The problem is that you seem to think they're mutually exclusive.
    The burden of proof is on the IRS.



    "Unless I blabbed to the whole world that I [committed X crime], how would someone know? Think about it." - Famous last words of innumerable prisoners who were convinced that they were smarter than they actually were.

    Use common sense - you don't think that anyone else could possibly find out that someone was paying his employees under the table or was cooking the books?
    How would that person go about it? The accountant can't say anything.



    I don't doubt that you can, but that's because you don't really understand the law and just assume that whenever anything bad happens, you can sue.
    I understand that IRS audits are held to the same search and seizure laws as anything else. Like I said, the Constitution doesn't cease to apply, just because we're dealing with the IRS.







    I just don't know what to say to this. There are approximately 3,000 prosecutions brought each year for federal tax evasion. That doesn't count the thousands more that brought in state court. Furthermore, the point of this push is not just to put people in jail - it's to deter others from underreporting.

    Compared to how many millions of tax payers?? Do you know that I have a greater chance of being wrongfully convicted of murder than being convicted of tax evasion?
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: Rats! City to Pay for Informing on Tax Cheats

    [quote=RightinNYC;1058333091]

    Then they don't bring charges. If there is, then they do. What's your point?
    The point is, without probable cause, they can't do ****.






    -Employee who handled the books and saw the underreporting
    Ok, you got one.

    -Employee who was getting paid under the table
    An employee is going to admit to tax evasion on his part. Hmmmm!
    -Disgruntled spouse who came across the books
    Ok, two. Been there, done that.

    -Competitor who found out from former employee that you were paying under the table
    At which time, the competitor goes to prison for industrial espionage. A felony, by the way.



    It's also unethical for an accountant to help you violate tax law. If they're willing to be unethical in that way to get your $2k payment each year, why would you think they'd hesitate to be unethical in this way to get 1/3 of your $500k in unreported sales taxx?

    You're exactly right. That's why you only tell your accountant what they need to know. If an accountant ratted out a client, that accountant would not only lose his license, but his testimony in any court hearing would be inadmissable. It's the same style of ethics that prevents a lawyer from testifying against his client.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by apdst View Post
    All they can do is audit you. Then you say, "oops, my bad, thougt I could deduct that".
    Leave the auditing and accounting to those with the knowledge. There's a sliding scale of certainty when it comes to deductions. If you take a large number of frivolous claims, you can be prosecuted for tax evasion. Furthermore, your accountant can be fined between 50% and 100% of the entire return amount. There are some real teeth behind the legislation regarding such deductions that has come out in the past five years. Ignorance is no excuse in an audit.
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    Re: Rats! City to Pay for Informing on Tax Cheats

    Quote Originally Posted by apdst View Post
    An employee is going to admit to tax evasion on his part. Hmmmm!
    Actually this is very common. It happens when the employee is paid under the table and then goes to get their income tax refund expecting a few thousand dollars of EIC. The employee may not have understood that they were being paid under the table, just that they got money each week. Earned income is not a bad thing, not for everyone.

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