Money Talks: Taxes 2011 - Do You Cheat on Taxes?
Fri, 11 Feb 2011 13:45:34 GMT —
Taxes - A part of life where many of us have the opportunity to cheat - and some of us do.
According to a recent IRS telephone survey, about 4% of Americans feel like its ok to cheat as much as possible on their taxes, and an additional 8 percent think it's OK to cheat a little here and there. 87% said they'd never cheat.
That may be, but in 2001, the last year the IRS released the information, the so-called tax gap - the difference between what was collected and what was owed was $345-billion: and 68% of that came from people not reporting income.
So basically, 87% of Americans say they would never cheat on their taxes, and yet, the IRS is saying hundreds of billions isn't getting paid in taxes. How do you explain the discrepancy? Well, one way might be to look at the difference what you think is and what the IRS thinks income is.
Let's say you buy some do-dad at a yard sale for $10 and sell it for $50. Is that reportable income?
"I don't report it because I don't think I have to."
"No, I didn't think you had to."
The answer to that question is that the profit is taxable - every dime you make however you make it is supposed to be reported as income.
Remember, 87% of people said they would never cheat on their taxes. Yet, we just asked three people - on television, no less if they would and they all said yes!
The fact is that many people report only income that's documented - they don't even know they're supposed to report everything.
In other words, that 345 billion dollar tax gap could be a mix...part honesty gap - and part information gap.
What about you? Do you think 87 percent of Americans would never cheat? Would you? Tell me about it right here at moneytalksnews.com.