Not paying taxes. I have questions .

[jhynesrockmtn]

My ex wife's partner worked as a contractor for years and didn't file tax returns or pay into SS. They were "married" several years back, but not legally. She doesn't want that potential baggage. She also wants my higher social security spousal benefit.

[TimT]

My wife’s sister and her family live in Qatar, her husband works oil and gas as a 1099. I know they don’t pay US taxes unless they spend more than XX days in the USA (can’t recall the number), but now I’m curious if they have to file any sort of paperwork with the IRS?

I worked in the sandbox in the late 70's til the mid 80's My first gig there was with a consortium formed as part of the Camp David accords, I worked on the airbase at Ovda,. While four US construction companies (Perini,Harbert,Howard,Berger), and the COE were involved, The consortiums headquarters were on Park Ave, NYC... I received a paycheck from a NY bank while living and working in Israel. All that was deducted from my check was social security..

We had to stay out of the states for X amount of days to not have to pay state or Fed taxes...

So we found some creative ways to get home under the radar.

Some good time were had

[Rick Lee]

If you're applying for a mortgage and are a W2 employee (or claim to be one), you just have to provide your two yrs of W2s. I doubt they look at withholdings on your paystubs. They verify employment and income, but not taxes unless it's tax debt and showing on your credit report.

I really doubt the IRS shows up on your doorstep or freezes bank accounts until you've ignored years worth of letters. So you could probably skate for a long time without filing. But once the letters start coming, the clock is ticking.

[Rick Lee]

BTW, I just paid my taxes today on my Amex. I get 2% cash back and the processing fee was only 1.84%, so I'm coming out ahead and get another month to pay. In theory, you could do this indefinitely and then just do balance transfers for as long as you can get away with it. The IRS doesn't care about your credit card problems after they get paid. If you eventually skip on the CC debt, sure, it will trash your credit. But it's at worst a civil matter that most CC companies would write off and the IRS doesn't touch it.

[berettafan]

dumbasses and cheats walk among us every day. sometimes they reveal themselves to you.

you just had a revealing.

[jyl]

IRS plans to fire 40% of employees.

Going to be open season for tax cheating, especially for more complex situations.

[3rd_gear_Ted]

Originally Posted by jyl

IRS plans to fire 40% of employees.

Going to be open season for tax cheating, especially for more complex situations.

1099's for $9901 is the secret auto under the radar code.
The rest are going to retire or take the buy out.

1099 used to be our radio code for being @ the strip club.

[rcooled]

Originally Posted by berettafan

Dumbasses and cheats walk among us every day.

Originally Posted by Rick Lee

I really doubt the IRS shows up on your doorstep or freezes bank accounts until you've ignored years worth of letters.

Originally Posted by Cajundaddy

Ask Wesley Snipes how it worked out for him.

The list of high-profile types and celebrities who were eventually caught cheating the IRS (sometimes to the tune of millions) is quite long.

Here's just a sampling → Celebrity tax cheats

[LWJ]

I will confess I didn't read all the prior posts. But I have a related story.

Way back, I worked with a guy. He managed a large chunk of the business I worked for. He was smart(ish). He had a good career. He became convinced he didn't need to pay taxes due to some constitution BS or something. I sort of made skeptic noises and didn't get involved.

Well, the IRS seemed to care quite a bit. The guy took a second job. Worked like a slave to pay off his debts and stay out of jail. Pretty damn funny. Stupid people do what stupid people do.

Saying is can't avoid death or taxes. There is a reason it is a cliche.

[Rick Lee]

Originally Posted by rcooled

The list of high-profile types and celebrities who were eventually caught cheating the IRS (sometimes to the tune of millions) is quite long.

Here's just a sampling → Celebrity tax cheats

That's not the same thing as in the OP. Lots of tax cheats try to argue something to the effect of sovereign citizen BS, and that never flies with the IRS or any court. Celebrities have very complicated tax situations, as they get income from so many sources and are subject to taxation in so many different locations. So it'd be especially easy for a state or locality to go after them for something small and then the IRS or another state gets wind of it and then the whole house of cards comes down. Some wage slave or independent contractor who works in one state or locality only and keeps things pretty simple likely won't attract much attention.

[Por_sha911]

Two thoughts:
A couple we knew hadn't paid their taxes in years. We never knew until they had to sell their $1.5 mil to keep from going to jail. Don't know what happened after that.

I wonder if the IRS reducing staff means more AI looking for tax cheats. It end up being far more efficient. Frankly, I'd like to see rewards for turning in cheaters like a bounty for wanted criminals. To me tax cheats are like shop-lifters. They aren't ripping off the store. They are ripping off the people who shop there who have to to pay more for the store to make a profit. Tax cheats are ripping off honest citizens.

[red 928]

Having a known criminal as a close friend is probably not a good idea.

[id10t]

Most of what I have seen bite people is not from the IRS but as said when they decide they need a mortgage for land or house

The other place non-filers get hosed is if/when they need to end up on social security or disability since your monthly check amount depends on what you were making, etc

[berettafan]

Originally Posted by jyl

IRS plans to fire 40% of employees.

Going to be open season for tax cheating, especially for more complex situations.

With a few decades as a tax cpa I have some thoughts on this-

-IRS, like all large operations, is looking at incorporating AI where possible. Eventually they will have phenomenal audit success rates. Compliance will go up when this happens. Imagine computers crawling all tax returns out there looking for specific markers and then sending automated letters to every hit proposing tax return changes and a bill of $xx,xxx. And nobody to call and discuss it with. Simply 'respond by x/x/xx or we file a lien'. That is the reality we will be facing before too terribly long.

-IRS is able to destroy anyone at any time financially with a simple letter and lien. Being short staffed doesn't mean this will happen less, it simply means that when it happens it will be much, much tougher to get a human on the phone to correct/address the issue. Like a drunken monkey with a machine gun. Not something you would wish to be around. Again, automated letters essentially holding a gun to your head.

What most folks fail to understand is IRS isn't stupid. They KNOW how people cheat they just don't have the manpower to deal with a large % of it. Thus compliance relies on fear. Leveraging massive compute power (AI is really just a marketing way of saying 'more compute power') to cover ALL returns means a fundamental switch from fear based compliance to directed force compliant. A VERY different world indeed. They KNOW that you're doing to cheat, they just haven't had time to get to YOU. That will eventually change.

[GH85Carrera]

With no tax filings he will never get any medicare or social security when he is over 67, and I will have zero sympathy. I have paid taxes since I was 16. No doubt the IRS is populated with a lot of bumbling bureaucrats. They missed one entire year of my taxes on my SS statement, and it took three years of sending in paperwork, and finally a in person visit to get that fixed.

And yes, I filed my taxes that year and every year. Now I get a nice deposit in my checking account each month, and great coverage on medical visits. And of course, I still pay my income taxes on the taxed income and my SS income.

[masraum]

Originally Posted by LWJ

I will confess I didn't read all the prior posts. But I have a related story.

Way back, I worked with a guy. He managed a large chunk of the business I worked for. He was smart(ish). He had a good career. He became convinced he didn't need to pay taxes due to some constitution BS or something. I sort of made skeptic noises and didn't get involved.

Well, the IRS seemed to care quite a bit. The guy took a second job. Worked like a slave to pay off his debts and stay out of jail. Pretty damn funny. Stupid people do what stupid people do.

Saying is can't avoid death or taxes. There is a reason it is a cliche.

Many years ago I heard some radio DJs interviewing some dude that was promoting that crap. Supposedly, he hadn't paid taxes in years. He said that the IRS came after him frequently, froze his assets, etc..., but he always won in the end. Even if that was the case, I would not want to have to live like that.

[fastfredracing]

I know a few guys who have never paid taxes . Most of them made their money under the table per se . My good bud Tod, however, ran a main street retail business for 15 years. Never paid sales tax, state or federal taxes. Of course it was all a cash business . I dont think he even had a checking account . He would walk and pay his mortgage ( he tookl over a land contract ) his insurance , and bought all his cars cash .
I tried to help him set up his business enterprise when he started, but he wanted nothing to do with it . He was a grateful dead tour kid, and lived his life like he was making a hustle on Shakedown street.
He managed to purchase a home and a commercial building , all under the radar .
I guess it does not really matter now . Him and a bud went in on several kilos of meth , and they ended up not selling any of it .
In the course of a year, they did all of it . The one guy is locked up for non related charges, and Todd spun himself out and committed suicide by driving himself into the river right by the Stadium in downtown Pittsburgh . I didn't find out all the details till about a year after his death, but I knew there was something very wrong with him the last few times I had seen him . He was one of my best buds in life, and our last encounter in life, I actually locked him out of my building , and threatened to hurt him if he didn't leave . I knew it was drug related, but did not know the depth of it all
Is it wrong? I dunno.. I pay my taxes, but in my mind not paying taxes is not an immoral act.

[Rick Lee]

I know two local business owners who just stopped collecting and filing sales tax with the state and city. They make you file every month, which is pretty silly for very small shops. The guys now just wrap their parts sales into their service bills. Most of the parts are pretty small dollar, so there's not even much incentive to use a tax exempt cert when they order them.

[David]

I'm a boyscout on my taxes. My wife is an independent contractor and we include every dollar she makes, even cash. If we get audited, I'd hire an accountant and likely end up getting money back from overpayment

I've gotten one letter from the IRS. It was when I mistyped my son's SS# 30 years ago. Simple mistake and easy to fix but that letter read like I was Al Capone or something. Not very nice letters, all about fear and intimidation.

[GH85Carrera]

Originally Posted by David

I'm a boyscout on my taxes. My wife is an independent contractor and we include every dollar she makes, even cash. If we get audited, I'd hire an accountant and likely end up getting money back from overpayment

I've gotten one letter from the IRS. It was when I mistyped my son's SS# 30 years ago. Simple mistake and easy to fix but that letter read like I was Al Capone or something. Not very nice letters, all about fear and intimidation.

I vividly remember receiving a registered letter from the IRS, stating they are auditing my company over the first year of taxes we were formed. I had to buy a new printer, as I wore out the old laser printer and two reams of paper. I spent three weeks gathering every single receipt from every vendor, and all the income. I had to use my CPA for help, and he let the auditor use an office in his building.

In the end, I she found we underpaid the taxes by 25 bucks because of my ignorance of calling one expense the wrong thing. She said for that little, it was not worth opening the file to accept the money, so case closed, no penalty or payment needed.

It was a harrowing ordeal I never want to go through again.

I did receive a scammer calling claiming I underpaid my taxes, and I was supposed to go buy gift cards at Walgreens and pay the bill that way. It was so stupid of a call, I just kept him on the line for 30 minutes, and kept asking the dumbest questions I could come up with. He demanded my SS# and I told him it was easy, 555-55-5555 and he accepted that.

The IRS will send a registered letter and require a signature. If you are not there, they get serious and they will find you. They have a particular set of skills, and they will and can make your life very hard.