What percentage of people cheat on their income tax?

Answer 1

The IRS is pretty tight-lipped on taxpayer compliance stats -- there are several lawsuits to get them to release information regarding them. However, some experts in the field estimate that taxpayer compliance audits result in significant additional tax liability on about 20% of returns examined. Minor adjustments are probably made 35% of the time, and some of them lead to refunds for the taxpayer.

The taxpayer compliance audit is intended to establish a baseline for identifying the types of items that are likely to lead to collection of additional taxes, not specifically identify tax cheats. However, that information is then used to target individual taxpayers who are likely to have similar errors on their returns. Those audits are much more likely to result in additional tax collections.

Based on the estimates it's probably safe to say that upwards of 20% of tax returns have significant errors on them and another 15% have minor errors. How much of that is due to outright fraud is hard to say especially given the complexity of tax laws and the interpretation of them.

Answer 2

I don't know of a percentage but I certainly wouldn't advise it. Uncle checks out everything you put on your tax forms and can ask for documentation to support your claims at any time. It's best to play buy Uncle's rules when it comes to taxes because you really don't want the IRS hounds on your back.

Answer 3

Wonder - This is IRS Special Agent McRyan, I'll need your SS number and address to look into this fudging.

Answer 4

I wouldn't suspect it was many. Most people PAYE through the nose, and you don't have much control over that.

Answer 5

I bet that 90% of those who itemize "fudge" a little - like on charitable donations. (Yes, I do too.)
-MM