Dun Dun Dun…

It’s April 15th and you know what that means… run the the post office and act like a mad man day.  (oh right and Tax Day)  Did everyone get their’s in?  I found out this year that they pretty much send your refund pretty quickly after you file if you file early.  Who knew?

I read a great article this morning on “What Happens If I Don’t Pay My Taxes?”  And the answer… there’s a good chance nothing.

No Thank You

It is estimated that about 7 million people a year fail to file their taxes and out of that number the IRS will only investigate about 158,000 cases.  That’s a 2% chance that the government is going to ocme looking for you.  Self-employed with no major assets or loans?  The chances are even less.  And what if they do catch you?  In most cases they will just file your taxes and make you pay a late fee.

There are some catches though.  Employers report employees in their taxes.  If your boss files and you don’t, that can send up a red flag.  Other red flags can pop up when you try to get a government job, or take out a mortgage.  Another common way of getting caught is people telling on you.  (ex-spouses and sworn enemies are popular choices)  Also if you had filed in the past and suddenly stopped filing, this can also send up the red flag to the IRS.

Even if you do file there is always the chance of getting audited.  The more money you make, the better the chance of getting audited.  With an income of $25,000 – $100,000 your chance is only 1 in 7,000 of getting audited so you don’t have to worry too much.  They also tend to audit those with huge discrepancies between how much you earn and how much you deduct.  Same goes for companies.

And finally why does the IRS go to this trouble?  Because they make $$$ off of it.  The IRS has a budget of about $5 billion a year, while they bring in about $55 billion.  Damn.

Good Luck!

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~ by katoque on April 15, 2009.

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