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My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, the

My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don't get thrown in jail and have all their other money and possessions and responsibilities taken away, as this article seems to imply they should do with billionaires. I don't see how this is evidence of special treatment for billionaires. The guy paid way more in penalties than he saved on taxes and also had to help prosecute his friend, who evaded way more tax than he did. It doesn't seem to me like he came out on top.

pwned1 6y ago
Yeah, generally criminal prosecution is reserved for the really egregious cases, such as complete failure to file or failure to claim large amounts of income for substantial time periods.
- ciamac 6y ago
  The claim is that he didn't declare $200M in income and hid it in off-shore accounts over a decade. Sounds like a large amount of money and a substantial time period.
GizmoSwan 6y ago
Billionaires can avoid paying taxes equal to what people make in life time. It is fraud. Why should Bernie Madoff gone to jail then?! if some guy can steal a car then? The scale matters.
- ChrisMarshallNY 6y ago
  Bernie Madoff went to jail because he ripped off very rich people, and, even more importantly, humiliated and betrayed them. I suspect, if the victims of his schemes had just been a bunch of plebes like us, then he would be sunning on the Riviera, right now.
  - missedthecue 6y ago
    Billionaire John Kapoor is in prison for another half decade for bribing doctors to prescribe opioids. Another example is the Jeff Skilling who went to prison for 15 years for ripping off customers, employees and shareholders, most of whom were not rich people. I don't think your narrative accurately reflects the facts.
    - ChrisMarshallNY 6y ago
      > most of whom It just takes one... Have a great day!
- webmaven 6y ago
  > Why should Bernie Madoff gone to jail then?! if some guy can steal a car then? Fraud and tax fraud are different crimes, and even if they were the same the number of counts in Madoff's case would be vastly different. In other words, you're much better off committing tax fraud than running a Ponzi scheme targeting rich people. Plus, I suspect that if Madoff had walked he would have died shortly thereafter in some freak accident or an apparent suicide .
lisper 6y ago
There are four differences. First, the IRS prosecutes a lot more low-income people than high-income people (by percentage as well as by absolute numbers) so a billionaire has much better odds of not getting caught. Second, billionaires have access to better layers, accountants, publicists and politicians to give them negotiating leverage if they do get caught. Third, the payoff for a billionaire successfully cheating on their taxes is much higher than for a non-billionaire. And finally, even if a billionaire does get caught and pays all their back-taxes with penalties, they will still most likely be a billionaire and be able to sustain a pretty posh lifestyle. So the expected value of the tax-cheating lottery is much higher for a billionaire than a normal person.
- majormajor 6y ago
  > Third, the payoff for a billionaire successfully cheating on their taxes is much higher than for a non-billionaire. And finally, even if a billionaire does get caught and pays all their back-taxes with penalties, they will still most likely be a billionaire and be able to sustain a pretty posh lifestyle. This is the weird part to me. I don't think the marginal payoff is higher for a billionaire, other than in ego or ideological or other less-rational terms. Someone making 50K who scams an extra 2K out of their taxes has gotten themselves a pretty big boost to their disposable income. While a billionaire already has millions to play with... I would support higher and harsher penalties for larger absolute amounts of tax fraud, though, because you're depriving your fellow citizens of more if you're keeping larger $$ amounts.
  - lisper 6y ago
    Billionaires think differently about money than non-billionaires. Ordinary people use money to exercise control over their own lives. Billionaires use money to exercise control over other people's lives, and when that is your goal, a few extra billion dollars means a few extra tens of thousands of people you can put on payroll to do your bidding, whatever that might happen to be. It lets you do things like run for president or go into space. It's not my cup of tea, but it's not fair to call it "irrational". Some people just want different things.
coldtea 6y ago
>My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don't get thrown in jail and have all their other money and possessions and responsibilities taken away, as this article seems to imply they should do with billionaires. Maybe, but that's sort of like how a person who slaps somebody usually doesn't get jail time compared to the person who beats somebody to a pulp. The billionaire tax cheat has much larger impact on society. And the billionaire has much less justification for doing so (if they pay their taxes properly they're still a billionaire).
- deleted 6y ago
  [deleted]
- narrator 6y ago
  The IRS has a lot of leniency because they know paying taxes is hard. Tax Court is one of the few places where you can SOMETIMES claim ignorance of the law as a valid defense to get penalties and such removed.
hn8788 6y ago
My dad had a similar experience with the IRS. He had startd a small business and was supposed to be paying something monthly, but he thought it was quarterly. He got fined, and when he mailed in his payment, he included a letter explaining that it was his first time running a business, and it was an honest mistake. ~6 months later he got a check back from the IRS for the fine amount, plus interest. They seem to be pretty lenient as long as you aren't actively trying to make their lives difficult.
- twox2 6y ago
  Are you comfortable sharing what year this was?
  - hn8788 6y ago
    I don't remember the exact year, but it was around 20 years ago.
stefan_ 6y ago
Yes, why don't we prosecute a one-time shoplifter the same as a guy who stole so much he used it to fund a shoplifting conspiracy, then paid a bunch more to various PACs and related contributions to not go to prison for it? The obvious, trivial answer of course is that in tax law, how much you evaded determines the severity of the crime.
matheusmoreira 6y ago
> The guy paid way more in penalties than he saved on taxes Is this a fact?
- modeless 6y ago
  The article states that he saved $43m and paid $137m plus several other things.
  - matheusmoreira 6y ago
    Is it certain that he had saved only 43 million though? Couldn't it be the case that they only found 43 million? If there's more hidden away and out of reach of the authorities, then he could still have beaten the system if that sum exceeds the penalties paid.
    - modeless 6y ago
      You have no basis for believing this. All I know about this is what I read in the article, and the article is clearly intended to show this guy in the worst possible light. If there was any hint that your conjecture might be true then I expect it would have been mentioned.
      - matheusmoreira 6y ago
        I don't believe it. I'm trying to ascertain the likelihood of it being true. I've seen people escaping these authorities by using cryptocurrencies and whatnot.
odiroot 6y ago
> My understanding is that if a little guy evades taxes, but then cooperates [..] then they generally don't get thrown in jail This is how it more or less works in my country but you do have to file a "active repentance" form and spill out of your misdeeds. Otherwise, anything you tried to hide, will work even harder against you.
elipsey 6y ago
>> My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don't get thrown in jail Where in the world did you get this idea? If you don't pay fully or on time, but don't lie, they just make you pay, because that's not "evasion." Elaborate premeditated lying using fake books or shell corporations to deliberately hide assets is a serious crime, which the rest of us can't get out of with our armies of lawyers and well placed phone calls to politicians.

pwned1 6y ago

Yeah, generally criminal prosecution is reserved for the really egregious cases, such as complete failure to file or failure to claim large amounts of income for substantial time periods.

ciamac 6y ago
The claim is that he didn't declare $200M in income and hid it in off-shore accounts over a decade. Sounds like a large amount of money and a substantial time period.

GizmoSwan 6y ago

Billionaires can avoid paying taxes equal to what people make in life time. It is fraud. Why should Bernie Madoff gone to jail then?! if some guy can steal a car then? The scale matters.

ChrisMarshallNY 6y ago
Bernie Madoff went to jail because he ripped off very rich people, and, even more importantly, humiliated and betrayed them. I suspect, if the victims of his schemes had just been a bunch of plebes like us, then he would be sunning on the Riviera, right now.
- missedthecue 6y ago
  Billionaire John Kapoor is in prison for another half decade for bribing doctors to prescribe opioids. Another example is the Jeff Skilling who went to prison for 15 years for ripping off customers, employees and shareholders, most of whom were not rich people. I don't think your narrative accurately reflects the facts.
  - ChrisMarshallNY 6y ago
    > most of whom It just takes one... Have a great day!
webmaven 6y ago
> Why should Bernie Madoff gone to jail then?! if some guy can steal a car then? Fraud and tax fraud are different crimes, and even if they were the same the number of counts in Madoff's case would be vastly different. In other words, you're much better off committing tax fraud than running a Ponzi scheme targeting rich people. Plus, I suspect that if Madoff had walked he would have died shortly thereafter in some freak accident or an apparent suicide .

lisper 6y ago

There are four differences. First, the IRS prosecutes a lot more low-income people than high-income people (by percentage as well as by absolute numbers) so a billionaire has much better odds of not getting caught. Second, billionaires have access to better layers, accountants, publicists and politicians to give them negotiating leverage if they do get caught. Third, the payoff for a billionaire successfully cheating on their taxes is much higher than for a non-billionaire. And finally, even if a billionaire does get caught and pays all their back-taxes with penalties, they will still most likely be a billionaire and be able to sustain a pretty posh lifestyle. So the expected value of the tax-cheating lottery is much higher for a billionaire than a normal person.

majormajor 6y ago
> Third, the payoff for a billionaire successfully cheating on their taxes is much higher than for a non-billionaire. And finally, even if a billionaire does get caught and pays all their back-taxes with penalties, they will still most likely be a billionaire and be able to sustain a pretty posh lifestyle. This is the weird part to me. I don't think the marginal payoff is higher for a billionaire, other than in ego or ideological or other less-rational terms. Someone making 50K who scams an extra 2K out of their taxes has gotten themselves a pretty big boost to their disposable income. While a billionaire already has millions to play with... I would support higher and harsher penalties for larger absolute amounts of tax fraud, though, because you're depriving your fellow citizens of more if you're keeping larger $$ amounts.
- lisper 6y ago
  Billionaires think differently about money than non-billionaires. Ordinary people use money to exercise control over their own lives. Billionaires use money to exercise control over other people's lives, and when that is your goal, a few extra billion dollars means a few extra tens of thousands of people you can put on payroll to do your bidding, whatever that might happen to be. It lets you do things like run for president or go into space. It's not my cup of tea, but it's not fair to call it "irrational". Some people just want different things.

coldtea 6y ago

>My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don't get thrown in jail and have all their other money and possessions and responsibilities taken away, as this article seems to imply they should do with billionaires. Maybe, but that's sort of like how a person who slaps somebody usually doesn't get jail time compared to the person who beats somebody to a pulp. The billionaire tax cheat has much larger impact on society. And the billionaire has much less justification for doing so (if they pay their taxes properly they're still a billionaire).

deleted 6y ago
[deleted]
narrator 6y ago
The IRS has a lot of leniency because they know paying taxes is hard. Tax Court is one of the few places where you can SOMETIMES claim ignorance of the law as a valid defense to get penalties and such removed.

hn8788 6y ago

My dad had a similar experience with the IRS. He had startd a small business and was supposed to be paying something monthly, but he thought it was quarterly. He got fined, and when he mailed in his payment, he included a letter explaining that it was his first time running a business, and it was an honest mistake. ~6 months later he got a check back from the IRS for the fine amount, plus interest. They seem to be pretty lenient as long as you aren't actively trying to make their lives difficult.

twox2 6y ago
Are you comfortable sharing what year this was?
- hn8788 6y ago
  I don't remember the exact year, but it was around 20 years ago.

stefan_ 6y ago

Yes, why don't we prosecute a one-time shoplifter the same as a guy who stole so much he used it to fund a shoplifting conspiracy, then paid a bunch more to various PACs and related contributions to not go to prison for it? The obvious, trivial answer of course is that in tax law, how much you evaded determines the severity of the crime.

matheusmoreira 6y ago

> The guy paid way more in penalties than he saved on taxes Is this a fact?

modeless 6y ago
The article states that he saved $43m and paid $137m plus several other things.
- matheusmoreira 6y ago
  Is it certain that he had saved only 43 million though? Couldn't it be the case that they only found 43 million? If there's more hidden away and out of reach of the authorities, then he could still have beaten the system if that sum exceeds the penalties paid.
  - modeless 6y ago
    You have no basis for believing this. All I know about this is what I read in the article, and the article is clearly intended to show this guy in the worst possible light. If there was any hint that your conjecture might be true then I expect it would have been mentioned.
    - matheusmoreira 6y ago
      I don't believe it. I'm trying to ascertain the likelihood of it being true. I've seen people escaping these authorities by using cryptocurrencies and whatnot.

odiroot 6y ago

> My understanding is that if a little guy evades taxes, but then cooperates [..] then they generally don't get thrown in jail This is how it more or less works in my country but you do have to file a "active repentance" form and spill out of your misdeeds. Otherwise, anything you tried to hide, will work even harder against you.

elipsey 6y ago

>> My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don't get thrown in jail Where in the world did you get this idea? If you don't pay fully or on time, but don't lie, they just make you pay, because that's not "evasion." Elaborate premeditated lying using fake books or shell corporations to deliberately hide assets is a serious crime, which the rest of us can't get out of with our armies of lawyers and well placed phone calls to politicians.