IRS Tax Cheat Poll

A recent IRS poll shows that 87% of American taxpayers believe it is NEVER ok to cheat on their income taxes.

In my experience as a tax attorney, I can’t help but think this little statistic is overly-optimistic.  It is obvious that the IRS is trying to spread optimism about the integrity of the tax system at a time when many Americans are making decisions about what (and what not) to report.  I just don’t think this statistic paints an accurate picture.  Here’s why:

  • The poll consisted of 1,500 randomly chosen adults; that’s a pretty small sample size.
  • The participants were questioned over the phone.  I’m gonna go out on a limb and say that tax cheats are more the type to screen their calls and not participate in polls.
  • There appear to have been some follow-up questions such as “What is your reason for honest and accurate reporting?” (to which 95 percent cited “personal integrity”), but what about asking “Do you (or have you) cheated on your taxes?”  I think this is an important question because, while many people believe it is wrong to fudge numbers, I think fewer people tend to strictly follow their own advice/beliefs.
  • It is unclear to me whether or not the IRS actually defined “cheating.”  For example, if the IRS had included in its definition of cheating “providing an estimate when an exact amount is readily available,” then I think we would be looking at something less than 87 percent.  Just keeping it real.

I would be interested in seeing more details about this poll.  If anybody finds anything, let me know!

Do Tax Cheats Feel Much Shame?

According to a survey of 1,105 Americans conducted by The Shelton Group, cheating on taxes is not as shameful a thing as it may have once been.  See Forbes article for more information.

The relevant portion of the survey asked “How embarrassed would you be if someone you knew found out that you were _____.”  Then from a list of offenses, participants were to select either “very embarrassed,” “somewhat embarrassed,” or “not embarrassed.”  So what do you suppose would cause people to be very embarrassed?  The results may surprise you:

  • shoplifting (73%)
  • driving under the influence (65%)
  • throwing trash out of a car window (59%)
  • cheating on your taxes (57%)
  • smoking (39%)

I’ve been puzzling over these results today and I haven’t been able to come up with much of an explanation.  If you ask the IRS, taxpayers still have a relatively strong fear of being audited, they believe everyone must contribute to society and pay their taxes, and they feel that cheating on your taxes is a serious transgression.  So how do you reconcile the Shelton Group data?

Maybe cheating on taxes is so uncommon that people don’t really know what their reaction would be; they don’t know how it ranks in relation to more everyday sins.  Unlikely, right?  Ok, maybe tax problems (and cheating to try to reduce them) are extremely common and no longer taboo.  Maybe Uncle Sam is perceived as this massive, insensitive brute who won’t miss a few thousand dollars here and there.  The ol’ “Stick it to The Man!” mentality.  Who knows…

What I want to know is this: besides smoking, is there anything less embarrassing than cheating on your taxes?