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Tax Service Blog
2014 Tax season: 12% of Americans say it's OK to cheat on taxes
|Posted on March 10, 2014 at 1:15 PM|
While the vast majority of Americans say cheating on taxes is unacceptable, a good amount think it's perfectly fine to under-report income, claim bogus deductions and inflate credits.
When asked how acceptable it is to cheat on taxes, if at all, 12% of respondents answered "a little here and there" or "as much as possible," according to a survey from the IRS Oversight Board that polled 1,000 people.
That's up slightly from 11% in 2012 and up from a low of 9% in 2008.
Corresponding with that increase, the survey found that opinions about the IRS have grown more negative, with an increasing number of people saying the agency devotes too many resources to enforcement instead of consumer services.
A record-low 39% of taxpayers feel the IRS "maintains a proper balance between its enforcement and service programs." And while most respondents said they support extra funding for the IRS, that percentage slipped from 67% in 2012 to 59% in 2013.
Bad financial situations may also drive some people to cheat, as they feel less able to afford an extra check to the government. Instead, they're putting their money toward financial necessities like medical bills, said Valrie Chambers, a professor of accounting at Texas A&M University at Corpus Christi.
"They justify not paying because they are paying all they can for something more important," said Chambers. "These are sad cases to see, and are probably more prevalent since the recession of 2008."
Others feel they have been cheated by the U.S. government and therefore want to "even the score" by cheating on their taxes, while still others oppose how the government would spend their money, said Chambers.
No matter how you justify cheating on your taxes, be ready to cough up a big fine if you're caught.
If you underpaid, you'll need to first pay the IRS what you owe. You'll also incur significant extra penalties and, depending on the case, you could even face prison time.
On the other hand, you could collect a hefty ransom if you're willing to rat someone else out for cheating on their taxes. The IRS will pay 15% to 30% of any amount exceeding $2 million that it collects from the tax cheat you turn in. For less than $2 million, you get a maximum award of 15%.
The good news, however, is that the majority of Americans aren't cheaters -- at least that's what they say. About 86% of respondents said it's "not at all" acceptable to cheat on taxes. Most said that honestly reporting their taxes is a matter of integrity, followed by fears of being audited or because they know the IRS receives information from third parties. Others say they are honest because they believe their friends and neighbors are.