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They put people in prison for that sort of thing If you report income honestly and simply don't pay taxes you get sent a bill a few times and then collection e

by patio11 11y ago

They put people in prison for that sort of thing If you report income honestly and simply don't pay taxes you get sent a bill a few times and then collection efforts escalate with e.g. offsets against your tax refunds, liens against your property, and garnishing your bank account and/or wages. You have to defraud them (very egregiously) to get prosecuted. Sorry to be picky about this, but we're on a forum chock-full of entrepreneurs and it's highly likely that there exist people here who will have a run-in with the IRS 1+ times in their life. It's not like getting prosecuted for embezzlement. It's like having an acrimonious dispute with your landlord. Money is the root of it, money will solve it, and money will pay boring straight-laced professionals who deal with this sort of stuff five days a week in a way that would make very, very poor television. If you owe the IRS $50k, that's very, very far from being the end of the world. It's not as socially acceptable as owing Bank of America $50k but it almost certainly carries a lower interest rate [+] and you'll find that the clockpunching bureaucrats over there will diligently pursue their process but won't break any land-speed records over it because neither they nor Uncle Sam really care about whether you pay that this year or in 2021. + If you had stiffed Uncle Sam on 50k for your 2010 taxes (due 4/15/2016) you'd presently be looking at paying ~$71k after interest and penalties, which works out to a hair over 7% APR.

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mikeash 11y ago
But it's the same with the passports, right? They have a big hammer they can use, but what they really want is their money, so they'll do what they can to get it. They want to have the threat so they can get their money. The new law says this only applies to "seriously delinquent tax debt" which means you not only owe it, but aren't paying it, it's escalated to a lien or levy, and you have no pending hearings about it. Maybe this is less than what it takes to get prosecuted, but it's not like they're just saying, "you owe us a lot, no travel for you until you pay us." The State Department can already refuse to issue or renew passports for as little as $2,500 in unpaid child support, or if you defaulted on a loan from the State Department to help you return to the US. So this general theme is not unprecedented.
tptacek 11y ago
Owing the IRS 50k is more socially acceptable than owing Bank of America 50k. If you get into intractable debt with Bank of America, they will destroy your credit. If the same happens with the IRS, they will put you on a payment plan.
- dsacco 11y ago
  Not to nitpick with the spirit of your point, but I wouldn't say this satisfies the requirements for socially acceptable. What you're explaining just means owing money to the IRS is an easier situation to resolve than owing money to a bank. Before you and Patrick explain the nuances of these scenarios (such as in this thread), I'm willing to bet most people look at it more like this: John owes the bank $50,000 Hey, John is almost done paying off his mortgage. That's just swell. James owes the IRS $50,000 Did you hear about James? What is he involved in and why doesn't he pay his taxes? I think social acceptance is more or less positively correlated with what's common for the middle class. Taking out $50,000 in student loans for a degree with poor ROI is inarguably a bad financial decision, but it's fundamentally sound in terms of social signaling. Conversely, not paying taxes is something that would be unthinkable to the anxious fiscal sensibilities of the middle class (but notably, not necessarily the upper class if they can benefit from it, and not necessarily the lower class if they can't afford it).
  - tptacek 11y ago
    Oh, I didn't realize he was referring to loans; I thought he meant deficiencies.
- deleted 11y ago
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by patio11 11y ago

deleted 11y ago

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mikeash 11y ago

But it's the same with the passports, right? They have a big hammer they can use, but what they really want is their money, so they'll do what they can to get it. They want to have the threat so they can get their money. The new law says this only applies to "seriously delinquent tax debt" which means you not only owe it, but aren't paying it, it's escalated to a lien or levy, and you have no pending hearings about it. Maybe this is less than what it takes to get prosecuted, but it's not like they're just saying, "you owe us a lot, no travel for you until you pay us." The State Department can already refuse to issue or renew passports for as little as $2,500 in unpaid child support, or if you defaulted on a loan from the State Department to help you return to the US. So this general theme is not unprecedented.

tptacek 11y ago

Owing the IRS 50k is more socially acceptable than owing Bank of America 50k. If you get into intractable debt with Bank of America, they will destroy your credit. If the same happens with the IRS, they will put you on a payment plan.

dsacco 11y ago
Not to nitpick with the spirit of your point, but I wouldn't say this satisfies the requirements for socially acceptable. What you're explaining just means owing money to the IRS is an easier situation to resolve than owing money to a bank. Before you and Patrick explain the nuances of these scenarios (such as in this thread), I'm willing to bet most people look at it more like this: John owes the bank $50,000 Hey, John is almost done paying off his mortgage. That's just swell. James owes the IRS $50,000 Did you hear about James? What is he involved in and why doesn't he pay his taxes? I think social acceptance is more or less positively correlated with what's common for the middle class. Taking out $50,000 in student loans for a degree with poor ROI is inarguably a bad financial decision, but it's fundamentally sound in terms of social signaling. Conversely, not paying taxes is something that would be unthinkable to the anxious fiscal sensibilities of the middle class (but notably, not necessarily the upper class if they can benefit from it, and not necessarily the lower class if they can't afford it).
- tptacek 11y ago
  Oh, I didn't realize he was referring to loans; I thought he meant deficiencies.
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