The average American pays their taxes, because the average American's taxes are collected and paid for them by their employer. The groups that underreport the

The average American pays their taxes, because the average American's taxes are collected and paid for them by their employer. The groups that underreport the most are contractors, followed by small business owners, though this usually comes in the form of over-claiming expenses rather than understating revenue. Wealthy taxpayers pay accountants and lawyers to do tax planning on them. While some of them do cheat on their taxes, most of them simply find ways to owe less...though as someone who used to provide these services, between about $500k in annual income and around $10 million, there's a donut hole where the fees paid to tax advisors and the expenses incurred to reduce taxes (i.e., charitable donations, etc.) usually exceed the savings from reduced taxes unless the client is willing to maintain the planning structure for 5-7 years.