It’s Fix the Tax Code Friday! Since I posted about Marion Barry’s tax woes earlier today, I thought it would be great fodder for Fix the Tax Code Friday. Tax evasion cases have often made news – from Wesley Snipes to Joe Francis to Helio Castroneves – especially when jail time is involved. Counsel in these matters generally argues that an alleged failure to file tax returns should be a private matter and not made a criminal case. Prosecutors argue, however, that big-time jail sentences deter other citizens from committing similar crimes (tax fraud, tax evasion, etc).
Today’s Fix the Tax Code Friday question is:
Should failure to file federal tax returns be a criminal offense? Is jail time an appropriate response for failing to file federal tax returns? And if so, should there be a dollar amount or number of years for which taxes are not filed, before jail time is imposed?
I have BIG problems with the cost our our increasingly outsourced prison system so the idea of paying a prison company to house someone for not paying taxes (or any other non-violent crime) strikes me as insane.
For the punishment to match the crime, I would have no trouble with extremely high financial penalties for tax evaders. I suspect that if those penalties were high enough, and enforced it would act as a much better deterrent since it changes the risk/reward balance for people who want to avoid paying their taxes.
In my opinion, tax evasion is tantamount to robbery. We all have to pay our fair share. Preparers are just as bad. Last year, a woman came to me after receiving an “invitation” (aka audit letter) from the IRS. Turned out, her previous preparer inflated expenses, created a business for her (with corresponding loss), and listed her home as a $100,000 capital loss. We really need certification for tax preparers that are not CPAs, lawyers, or EAs.
I agree with TechFun. Prison time for tax invasion should only occur for those who absolutely refuse to pay their taxes. We should make sure that the fines and penalties for not paying ones taxes are much more than a cost of doing business.
Hey, let’s do both. Jail them and seize all their assets. And none of this transfer to wife and kids crap. Void them as fraudulent transference. Oh, and while we’re at it, let’s take out the reliance safe harbor. Like SOX, if you sign it (the tax return), you’re liable for it.
I don’t know what the answer is. I believe everyone should pay their fair share and it drives me crazy when I see/hear television or radio ads about settling taxes for pennies on the dollar. Stuffing them in overcrowded jails won’t produce the taxes that they didn’t pay – it just compounds the problem.
If you look at the Marion Berry and Wesley Snipes cases, you see that the courts aren’t as tough on these folks as you’d expect. Penalties and prosecution don’t seem to be deterrent enough. In my CPA practice many clients are very afraid of the IRS and go so far as not wanting to take legitmate deductions because they don’t want to cause trouble.
I think evaders need a conscience transplant.
These people should pay back society what they have taken. I think that this would be best done through community service. See how others need help. It may show them that they are being selfish. They can find that they can pay less taxes by finding great causes to send their excess money to. Open their eyes to the real world where people are honest.
This makes me also think of punishments for people like Madoff. Take all their money (since it wasn’t theirs in the first place) and make them work an honest job such as tending the counter at McDonalds. Also make them donate their time to help those in need. It may open their eyes to an honest day’s work.
I think Not. Because guys and gals, there are many places who won’t send out the w2s in time, etc. to where you can file your taxes. I know, because my husband’s jobs that he does is like that. it’s the way they are… he belongs to a group like iron workers, mechanics, boiler makers, etc.
and has to work several different jobs in different states.
some don’t bother…
so disables some people not to be able to.
I’d say look into that stuff, before ‘jailing’ someone. It might/might not be his/her fault in the truth of it all.
cause you can’t ‘jail’ them just because of ‘appearence’ of guilty.
got to find out the truth, cause after all you’re suppose to be Innocent until proven guilty, hence my theory and new knowledge.
The federal tax code is a colossal waste of resources. Instead of arguing about who should go to jail. We should argue about how to abolish this unequal series of laws and statutes and place citizens back on equal footing. How can the federal tax code treat citizens equally when its very nature is to grant loopholes based on how you spend your money, or your age, or your line of work, or your family size, or where your live or your place of birth, or countless other points that make each person unique?
Ok what about your favorite waitress at you local restraunt. Ever give her a tip . You really think all of her tips are declared. Go work as a waitress for 1 month You will learn. or taxi drivers or handymen or the person who cleans your house etc, etc, Tax evasion is fine with people if it save them money on a house repair. It is really crimnals judgin crimnals how it that for truth folks!!!!