Honest Taxpayers?

A recently completed survey on taxes, honesty and cheating directed at individuals and small businesses finds that despite the complexities and ever-increasing types of taxes and rates, Americans are surprisingly honest and well-intentioned on their taxes, and typically step into only a few gray areas.  Taxpayers more often cheat on boy-friends and girl-friends and spouses than incomes taxes.

Trump Effect on Tax Surveys?

Over 90% of those surveyed claim that they have never knowingly cheated on income tax returns.  And respondents say that they truly want to honestly report and pay the correct amount of incomes taxes.  But perhaps we’ve got the Trump effect going on a bit here too – many respondents may be afraid to say what they really think.  What is the upside of telling someone who says they are conducting a survey that you cheat on your taxes, even if only just a little?  People are increasingly leery of surveys and such these days, and may report what everyone wants to hear rather than the tawdry truth.  Just like virtually all of the political surveys in 2016 revealed that Donald Trump had no chance of winning.  Moreover some may be in straight salaried situations where cheating is nigh impossible, and some may forget the wild estimates that they provided in previous times (“I drive my automobile 95% for business” or “all of my restaurant expenses were for business”).

For example, the survey says that almost 60% admit to cheating on a diet, and one in five admit to stepping out on romantic partners such as a spouse.  But really – think about it – is there anyone who has NOT cheated on a diet?  Then why are so many of us over-weight?  Seems the percentage of diet-cheaters should be closer to 99%.  And other surveys have told us for many years that over 50% claim that they have been unfaithful to a boy-friend, girl-friend or significant other.  Why do only 20% report this on the tax survey?

What Taxpayers Report on Surveys

But among us saintly taxpayers, some of us did report tax-cheating as follows:

• 7% didn’t report cash income, such as payments received “under the table.”
• 7% over-reported the number of dependents (but this isn’t really cheating since it catches up with you at year-end), itemized deductions or tax credits.
• 5% did not report tips or gifts they received (but isn’t this the same as not reporting cash income?)
• 5% paid someone but did not report this as a business expense (well that’s real smart – so now your income looks higher and MORE taxes are due).
• 3% claim to have unreported gambling winnings.  (Are these the same people who report that they NEVER lose money in Las Vegas?)

Surveys are becoming more and more dubious these days, and perhaps including those on tax-cheating.