3 ms·

You only go to prison if you willfully and purposely try to defraud the government. It’s more of a, “Pay what you believe you owe based on your best guess and

You only go to prison if you willfully and purposely try to defraud the government. It’s more of a, “Pay what you believe you owe based on your best guess and the laws as you best understand them, and if we disagree we may ask you to pay more.”

bunderbunder 8y ago
> if we disagree we may ask you to pay more The opposite can happen, too. The last time they disagreed with me on how much tax I should have paid, they mailed me a check for the difference.
- nickjj 8y ago
  Did they give you 5% interest on the amount you overpaid? Because that's what they take from you if you underpay (by accident or not). Living in the US is like: "oh you were born and live in the US? We're forcing you to give us a huge chunk of your earnings for your entire working life, make it close to impossible to determine the exact amounts and then fine you 5% interest if you happen to underpay, but we'll never give you interest if you overpay.". Edit: Well, as mentioned the tax system is super complex here and I obviously don't know the rules for every case. It seems in SOME cases you do get interest when the IRS owes you money but personally I've never seen this, where as I've always had to pay x% interest if I ever owed anything.
  - cbhl 8y ago
    The one time when this happened to me (they thought I was ineligible for a refundable tax credit; I mailed them both a check for the amount they thought I owed and proof that I was indeed eligible for the tax credit) the IRS did actually compute and add interest to the refund check! Sure, the gov't cashed the check and held on to the money for like two months, but the interest at the end was a pleasant surprise.
  - RubberSoul 8y ago
    Yes, the IRS will pay you interest under certain circumstances. Two examples are when they are late processing a refund or when a prior return is amended. I got a 1099-INT from the IRS in 2018. The interest rate is not 5%, however. Also, 5% is not currently the risk free rate of return. Also, it sounds like you're referring to the penalty for underpayment, which I believe is currently 3.6% of the total underpayment for the year [0]. This only kicks in under certain circumstances. [0]: https://www.irs.gov/pub/irs-pdf/f2210.pdf https://www.irs.gov/pub/irs-pdf/f2210.pdf
    - nickjj 8y ago
      What circumstances will they pay you interest? That has never happened to me. Because this year I got hit by some underpayment penalties (with interest added on top) but at the same time I also got a refund which had no interest applied to it. That is being self employed and paying estimated taxes every quarter.
      - perl4ever 8y ago
        Once I was getting a background check in which I had to certify all my debts to the government were paid. I realized that several years back, I had worked at a temp job for a very brief time and I probably never got a W-2 and therefore never paid taxes on it. Thus, I called up the IRS, got the W-2 information which they had, and duly filed an amended return with a check for something like $20. However, in a rather short amount of time, I got a letter from the IRS stating that they could not accept a payment for a return more than a couple years old and here was a check for the amount, plus interest. So I can tell you they not only pay interest on your money, but they pay it on money they are returning even though you actually owed it.
- astura 8y ago
  Same thing happened to my sister! She filled out the tax form, thought she owed, mailed in a check, and then received a check back from the IRS saying they actually owe her and told her where her mistake was.
- stordoff 8y ago
  Surely this raises a question: why don't they just tell you what you owe (and you can dispute it if you wish)?
ultrarunner 8y ago
"ask"
- themagician 8y ago
  It definitely is an ask. If you can’t pay it you can often negotiate an amount you can pay. And they even let you pay over time.
  - jermaustin1 8y ago
    My favorite "bank" to "borrow money" from is the IRS/Treasury. Low interest, incredibly favorable re-payment plans, and never have to talk to a single person!
dominotw 8y ago
> willfully and purposely try to defraud the government. whats the standard for willfully vs a mistake?
- themagician 8y ago
  “File a false amended return, including a false tax refund claim of over $4 million for the year 1996, and a false amended return, including a false tax refund claim of over US$7.3 million for the year 1997.” That’s from the Wikipedia page about Wesley Snipes. That’s what it takes to get the IRS to really go after you. Not only do you have to do it intentionally, but when you get caught you need to hold the line and say that you refuse to pay. If you make a “mistake” and claim more deductions than is reasonable or just outright fail it file once or twice nothing really happens. They just try to correct the “mistake.” They try to settle or put you on a payment plan or maybe try to garnish your wages if you don’t respond. When the IRS goes after tax fraud they are looking for someone trying to claim a multimillion dollar 2nd home in the Hamptons as a business expense, not someone who says they bought more office supplies than they really did. Or when someone with no kids tries to get multiple child tax credits. When you get audited (by the IRS or anyone, really), they will ask you for a bunch of documents and then come up with their own calculation based on what they believe you owe. You can pay it and be done with it or dispute it. If you dispute it, then it may become contentious. Only then does it even really become an issue. At the end of the day the “standard” is whatever a judge decides is reasonable, should it even rise to that level. But it almost never makes it that far because someone settles. Generally speaking, the only people who go to prison over tax fraud are those who CAN pay but refuse to.
  - dragonwriter 8y ago
    > At the end of the day the “standard” is whatever a judge decides is reasonable. Because fraud is criminal, in practice the standard is whatever a jury would find willful beyond a reasonable doubt (or, perhaps more to the point, whatever the US Attorney can convince you and your attorney that a jury would be unacceptably likely to see that way.)
  - Gibbon1 8y ago

bunderbunder 8y ago

> if we disagree we may ask you to pay more The opposite can happen, too. The last time they disagreed with me on how much tax I should have paid, they mailed me a check for the difference.

nickjj 8y ago
Did they give you 5% interest on the amount you overpaid? Because that's what they take from you if you underpay (by accident or not). Living in the US is like: "oh you were born and live in the US? We're forcing you to give us a huge chunk of your earnings for your entire working life, make it close to impossible to determine the exact amounts and then fine you 5% interest if you happen to underpay, but we'll never give you interest if you overpay.". Edit: Well, as mentioned the tax system is super complex here and I obviously don't know the rules for every case. It seems in SOME cases you do get interest when the IRS owes you money but personally I've never seen this, where as I've always had to pay x% interest if I ever owed anything.
- cbhl 8y ago
  The one time when this happened to me (they thought I was ineligible for a refundable tax credit; I mailed them both a check for the amount they thought I owed and proof that I was indeed eligible for the tax credit) the IRS did actually compute and add interest to the refund check! Sure, the gov't cashed the check and held on to the money for like two months, but the interest at the end was a pleasant surprise.
- RubberSoul 8y ago
  Yes, the IRS will pay you interest under certain circumstances. Two examples are when they are late processing a refund or when a prior return is amended. I got a 1099-INT from the IRS in 2018. The interest rate is not 5%, however. Also, 5% is not currently the risk free rate of return. Also, it sounds like you're referring to the penalty for underpayment, which I believe is currently 3.6% of the total underpayment for the year [0]. This only kicks in under certain circumstances. [0]: https://www.irs.gov/pub/irs-pdf/f2210.pdf https://www.irs.gov/pub/irs-pdf/f2210.pdf
  - nickjj 8y ago
    What circumstances will they pay you interest? That has never happened to me. Because this year I got hit by some underpayment penalties (with interest added on top) but at the same time I also got a refund which had no interest applied to it. That is being self employed and paying estimated taxes every quarter.
    - perl4ever 8y ago
      Once I was getting a background check in which I had to certify all my debts to the government were paid. I realized that several years back, I had worked at a temp job for a very brief time and I probably never got a W-2 and therefore never paid taxes on it. Thus, I called up the IRS, got the W-2 information which they had, and duly filed an amended return with a check for something like $20. However, in a rather short amount of time, I got a letter from the IRS stating that they could not accept a payment for a return more than a couple years old and here was a check for the amount, plus interest. So I can tell you they not only pay interest on your money, but they pay it on money they are returning even though you actually owed it.
astura 8y ago
Same thing happened to my sister! She filled out the tax form, thought she owed, mailed in a check, and then received a check back from the IRS saying they actually owe her and told her where her mistake was.
stordoff 8y ago
Surely this raises a question: why don't they just tell you what you owe (and you can dispute it if you wish)?

ultrarunner 8y ago

"ask"

themagician 8y ago
It definitely is an ask. If you can’t pay it you can often negotiate an amount you can pay. And they even let you pay over time.
- jermaustin1 8y ago
  My favorite "bank" to "borrow money" from is the IRS/Treasury. Low interest, incredibly favorable re-payment plans, and never have to talk to a single person!

dominotw 8y ago

> willfully and purposely try to defraud the government. whats the standard for willfully vs a mistake?

themagician 8y ago
“File a false amended return, including a false tax refund claim of over $4 million for the year 1996, and a false amended return, including a false tax refund claim of over US$7.3 million for the year 1997.” That’s from the Wikipedia page about Wesley Snipes. That’s what it takes to get the IRS to really go after you. Not only do you have to do it intentionally, but when you get caught you need to hold the line and say that you refuse to pay. If you make a “mistake” and claim more deductions than is reasonable or just outright fail it file once or twice nothing really happens. They just try to correct the “mistake.” They try to settle or put you on a payment plan or maybe try to garnish your wages if you don’t respond. When the IRS goes after tax fraud they are looking for someone trying to claim a multimillion dollar 2nd home in the Hamptons as a business expense, not someone who says they bought more office supplies than they really did. Or when someone with no kids tries to get multiple child tax credits. When you get audited (by the IRS or anyone, really), they will ask you for a bunch of documents and then come up with their own calculation based on what they believe you owe. You can pay it and be done with it or dispute it. If you dispute it, then it may become contentious. Only then does it even really become an issue. At the end of the day the “standard” is whatever a judge decides is reasonable, should it even rise to that level. But it almost never makes it that far because someone settles. Generally speaking, the only people who go to prison over tax fraud are those who CAN pay but refuse to.
- dragonwriter 8y ago
  > At the end of the day the “standard” is whatever a judge decides is reasonable. Because fraud is criminal, in practice the standard is whatever a jury would find willful beyond a reasonable doubt (or, perhaps more to the point, whatever the US Attorney can convince you and your attorney that a jury would be unacceptably likely to see that way.)
- Gibbon1 8y ago