Tax Fraud - Report or Ignore?

[1990C4S]

Someone I know is committing tax fraud. Not 'maybe', I know for a fact. They are claiming expenses that are not related to the 'business' (lease payments on a vehicle, office space in a house, etc). These would be valid deductions if there were was a valid ongoing business (there isn't) and if the expenses were work related.

The other details don't matter, aside from the fact that I have no obligation not to divulge this information.

Would you report them?

I'm don't want my opinion of this person to be part of my decision, I'm looking for independent feedback.

[wdfifteen]

Originally Posted by 1990C4S

Would you report them?

No.
Our system of taxation is a disaster. It's not going to get any better unless it gets so bad that it is completely unenforceable. You may be doing the whole country a favor by ignoring it.

[recycled sixtie]

I believe you can report this tax perp on an anonymous basis. However you must be squeaky clean yourself. I don't think I would do it. Could be traced back to you.

However if they were out and out bad ie. thieves, vandals,drunks, druggies, dogs barking at all hours then I might. Complete scumbags yes. If not no. It is quite possible they will get audited anyway because how long can they get away with it?

If it was me no......

[Arizona_928]

Don't they give you a percentage of what is collected...?
Anyways, I wouldn't. Not worth the stress, nor the headache.
Sounds like you have beef with said person. Don't be a blue falcon...

[stevej37]

Ignore...just a small drop in a large bucket.

[JD159]

Not worth the effort. Perhaps if I did not like them. If they were a friend, absolutely not.

[1990C4S]

Originally Posted by recycled sixtie

I believe you can report this tax perp on an anonymous basis. However you must be squeaky clean yourself. I don't think I would do it. Could be traced back to you.

I am clean. 100%.

More this...

Originally Posted by AZ_porschekid

Sounds like you have beef with said person. Don't be a blue falcon...

Than this.

Originally Posted by JD159

If they were a friend, absolutely not.

Originally Posted by AZ_porschekid

Don't they give you a percentage of what is collected...?

I have no desire to be paid for this information. They are cheating, I pay my taxes, I want them to do the same.

[sand_man]

Ignore.

[berettafan]

a central belief in my life is that rats rank somewhere below used car salesmen and attorneys.

now as a cpa I can tell you I push cheats far, far away from me. best to just stay away from such folks. get too close and some of that dirt might get on you.

[Arizona_928]

Well that is your own ethics.
Pro's, Con's to each decision.
Are they scraping by or grossly sticking it to the man.

[berettafan]

btw if he's taking expenses on a schedule C with no offsetting income you might see him get pinched quicker if he just keeps doing it. IRS may get curious and question profit motive and/or look at hobby loss rules after 3 years or so.

[1990C4S]

Originally Posted by AZ_porschekid

Are they scraping by or grossly sticking it to the man.

This person created their own financial and legal issues and is now hanging on by a thread but living the life of a high roller.

The tax evasion is through a holding company with no actual business, it may go on for a long time.

[legion]

Originally Posted by wdfifteen

No.
Our system of taxation is a disaster. It's not going to get any better unless it gets so bad that it is completely unenforceable. You may be doing the whole country a favor by ignoring it.

This.

[Noah930]

Sounds like you feel inclined to report it.

[1990C4S]

Originally Posted by Noah930

Sounds like you feel inclined to report it.

Previously yes. Now, not so much. 'Perhaps' some bitter feelings were contributing...

I have been sitting on this for a year. Tax year two is coming up. It's now or never.

[Arizona_928]

Originally Posted by 1990C4S

It's now or never.

That's a bit bleak.
I'm inclined to agree with Beretta. He'll get caught; eventually...
Hell might save him some money if you report him now. Fellow might even thank you later...

[cashflyer]

What benefit is it to you to report them?
What harm is it to you to mind your own business?

[-Levi-]

really?...really? what are you Americas police?

I think this sums you up nicely. - first 3 minutes.
https://www.youtube.com/watch?v=CTB0yWm6fRI

[nota]

if it is trump
go for it

[wdfifteen]

Originally Posted by berettafan

btw if he's taking expenses on a schedule C with no offsetting income you might see him get pinched quicker if he just keeps doing it. IRS may get curious and question profit motive and/or look at hobby loss rules after 3 years or so.

I was at a table with a couple of CPAs who seemed to agree that with the budget cuts congress imposed on it, the IRS is not going after any tax return anomalies that don't promise a net positive return. So according to their theory, yes, the longer he does it, the more he'll owe and the better the chances he will get pinched.