i know someone who is a self employed carpenter and makes good money..sometimes the work is slow but when its good its good. this person has been working for years being paid cash and has not filed taxes or paid any taxes for sometime. isn't he supposed to file a 1099 or something? what if any are the consequences if he is found out?
2007-03-28 17:56:57 · 4 answers · asked by MIMKA 1 in Business & Finance ➔ Taxes ➔ United States
Is that a real person or in your fiction. How do you know that he has not filed tax.
But if really someone is not paying tax what he is supposed to pay, he will be punished. So don't try to steal tax.
2007-03-28 18:02:54 · answer #1 · answered by a1b2c3d4test 3 · 0⤊ 0⤋
No, he's not supposed to file a 1099, he's supposed to file a tax return, showing ALL of his income. And yes, it's tax evasion if he doesn't.
Consequences if he is found out are possible prosecution and prison term, but would more likely monetary penalties. He'd have to pay the back tax that he owed (and the IRS probably wouldn't be real generous with allowing deductions), plus interest and penalties which could really add up.
2007-03-29 13:02:29 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
What you are describing is tax evasion. A classic case, by the way. When he's caught, prison time is a very likely possibility, along with a tax assessment from the IRS that will probably take him the rest of his life to pay off.
If he manages to make it to retirement age without ever paying any taxes (not very likely, but anything is possible) he'll be in for a very rude shock when he applies for Social Security and Medicare. Since he hasn't paid in to either system he won't get anything from them. At least if he were in prison he'd have "3 hots and a cot"; he wouldn't even have that in his "Golden Years" without SS and Medicare most likely.
2007-03-29 00:57:29 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
A 1099 is what his customers may file to notify Uncle Sam that they have paid him. Some day, some IRS auditor will find a 1099 with his information on it and do some checking.
Consequences for not paying tax may include, in addition to having to pay the taxes owed, penalties, interest, possible seizure of his assets and the worst one, prison.
2007-03-28 18:08:31 · answer #4 · answered by Aldo the Apache 6 · 2⤊ 0⤋
tax evasion is the general term for efforts by individuals, firms, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability, and includes, in particular, dishonest tax reporting (such as declaring less income, profits or gains than actually earned; or overstating deductions).
Tax evasion is a crime in almost all countries and subjects the guilty party to fines or imprisonment.
2007-03-28 18:06:29 · answer #5 · answered by moolahcometh 3 · 1⤊ 1⤋
Well he is "supposed to" and it would be good of him but actually technically you don't HAVE to. If everyone does their share with taxes..and stops voting for idiots, the money could be used wisely and help a lot...but it's not and it just goes to line some crooked politicians wallet.
Technically he COULD get in a lot of trouble but there are actually a lot of legal loopholes in the tax system and if he could afford a really good lawyer he could get off with nothing. But thats if he could afford that.
However you would be suprised at the number of Americans who don't pay their taxes each year and get away with it.
2007-03-28 18:07:55 · answer #6 · answered by slawsayssss 4 · 0⤊ 4⤋