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Do You Report All Your Income?

It came to my attention recently that one of the service providers of our family does not report all of his or her income. I’ve always “known about it” in a roundabout way, but it was actually stated to me directly. I’m in a quandary about what to do…. and I’m also mad about it.

The Tax Cheat

I suggested that instead of paying this person, we just set up an automatic transfer from my account regularly, saving me the hassle of writing a check each week. The person told me that they definitely did not want to do that because then there would be a record of the money and they would have to report it. WHAT??!!

I’ve been asking around to see how common it is and it appears that it’s pretty common for this service. So, unfortunately, it isn’t that easy for me to replace this person with another one that will report their income. It actually seems to be a widespread, and very disturbing, problem. I’m guessing that this is common with many industries that pay in tips too.

We Pay Taxes, Why Don’t You?

I’m fuming. Not only at the individual, but at all the people who don’t think that they have to report their income to the IRS. Why on earth would you be entitled to not pay tax, when millions of other Americans have to? I can only assume that my taxes are higher to account for all of those who do not pay their fair share.

When I work, I work my butt off on stuff. We’ve been successful in launching our new company and we reported every single dollar of income. Why? Because it’s the right thing to do. If you choose to live in America where you can earn money you’re obligated to pay tax on that income.

How to Report to the IRS

Do you know someone that is not paying tax? Here are directions on how to rat out tax cheats [1]. Rewards can be up to 30% of recovered unpaid taxes.

I haven’t decided how to handle this issue. Would you report a tax cheat? What about an innocent spouse [2]?

Tell Me Why

I’d love to hear people’s arguments why you think you don’t have to pay taxes on your earned income and I do. I’m not saying that you shouldn’t take advantage of fun tax deductions [3] and other ways to cut down on taxes [4] that are within the law. I’m against under and non reporting of earned income.

I’m also not arguing the tax law here, that is done elsewhere: 66% Of American Corporations Pay Zero Federal Income Tax. [5] I’m more focused on figuring out what the mentality is of people who feel they don’t have to report their income.

Do you report all your income?

(Although, do me a favor and post somewhat anonymously if you are going to tell me that you don’t… I don’t need a bigger problem on my conscience!)