Newsletter – May 2017

The Epidemic of Tax Cheating

Nobody likes to pay taxes. I don’t. You probably don’t. But as the old axiom states, the two facts of life are death and taxes. Now we do have some control about our reaction to taxes. We can whine and complain about the amount of taxes that we pay. We can accept the fact that we have to pay taxes and the benefits that they provide. We can legally pay our fair share of taxes by being honest and report what you are required to report. We can get angry and have nothing to do with paying taxes by not intentionally paying into the tax system by deceiving and cheating. In my opinion the only option here is to obey the law and pay your fair share of tax under the law.

Tax Avoidance vs Tax Evasion

We live in the greatest country in the world. The greatest republic and democracy civilization has ever seen. Part of being a citizen in this great country is to assist in funding our government so it can serve the people. That is what makes a good citizen. Paying into the tax system and obeying the laws of the land. Our country gives each citizen so many opportunities, blessings, and freedoms that we should want to at the very least pay taxes that are legally permissible. Many taxpayers do not do this. They cheat by tax evasion which is essentially stealing and lying. Tax evasion comes in many forms. Taxpayers can intentionally not file a tax return, report phony numbers, or just blatantly lie on a return about a multitude of things. But at its core it is still cheating and it is wrong. On the other hand there is a better way, a more constructive way, and that is tax avoidance. Now tax avoidance is not wrong. These are laws that the government passes so that taxpayers can take advantage of legally. Such laws include implementing a retirement plan, taking advantage of available tax credits, or just taking advantage of certain deductions that are available to the taxpayer. The fact is that the government wants you to take advantage of these laws. Most of these laws were passed for a specific purpose and as taxpayers we should take advantage of these laws if they are afforded to us. By tax avoidance we are not cheating the system we are legally taking advantage of tax laws that were passed for our benefit.

Tax Equality

Is our tax system fair? I would argue no it is not. Does it sometimes benefit the rich at the exclusion of the poor? Sometimes it does. It is not a perfect system. It is a complicated system. But it is a system that we as American citizens must all abide to and play by the same set of rules. Just because you may think that a law is unjust or unfair does not give you nor any other taxpayer the right to evade tax or cheat the system. If you think the system is broken or needs to be changed you can pursue change legally by the ballot box or you can follow the current laws and take advantage of them legally.

No Justification for Cheating

Over the past few years I have seen an increase in tax cheats. Some are blatant. Some are more creative and deceptive but in the end it is still cheating. I have counseled many clients over the years on obeying the rules and playing by the rules. Most clients are very receptive and want to play by the rules and are happy that they have an accountant who is looking out for their best interests. Clients are also happy that I am a true advocate for them. They like the fact that I will do everything possible to lower their tax bill by taking advantage of tax laws legally and at the same time protecting their interests. Cheating on your taxes is never acceptable no matter the situation and getting caught can have dire penalties. Follow the law and you will be better off and so will our country. Don’t go with the flow. Be honest and be real.