Ten Ways NOT To Cheat On Your Taxes


We’re not going to spell out exactly how to cheat our government of their hard-earned peso equivalents. Posting that would just be irresponsible. But here are ten ways you definitely shouldn’t do it particularly if you, say, want to avoid an audit, or worse...


When trying to sneak a few extra grand past Uncle Sam, failing third grade arithmetic is not the best place to start. Nothing screams “shady accounting” better than adding five and seven and getting thirteen.

Solution: After years of being shackled to our computers and cell phones for mathematical accuracy, there’s finally a handheld device that will let you break free. It’s about the size of an iPhone, and replicates the functions of a digital calculator application perfectly. Pick one up and use it to check your work. Twice.

9.) DO IT WHILE MAKING > $100,000 A YEAR

Sixty percent of all taxes come from people who earn six figures or more. Tax dollars from the top one percent equal those paid by the bottom ninety. Short answer? When audit time comes around, the IRS targets the rich, and it’s not because of their Robin Hood complex. Wesley Snipes, are you listening?

Solution: With the ability to monitor every American citizen at all times a good five years off (Facebook will be involved), the IRS is a real organization with limited resources. Don’t be a big target. If you are a big target, at least be subtle about it, you rich bastard. Which leads us to our next point…


"We don't pay taxes. Only the little people pay taxes.” Even for those not blessed with the acute megalomania of the late, great Miss Leona Helmsley, it’s best to refrain from telling the world you’re now a white-collar criminal mastermind, especially if you’re really rich. Besides the whole “word gets around” factor, the IRS will pay some lucky snitch between 15 and 30% of the amount recovered from your conviction if “the amounts in dispute must exceed $2 million for any taxable year and, if the taxpayer is an individual, the individual's gross income must exceed $200,000 for any taxable year in question.”

Solution: For the next three years (the statute of limitations on an audit), it’s probably safest to live in a constant Orwellian state of suspicion. Assume there are no more friends, neighbors, even spouses in your life–only potential informants.


Obvious, yes, but so easy to forget you’re not the only one getting those W-2 and 1099 forms. Even in less transparent situations (business owners, freelance consultants, cash income from your home meth lab, etc.) the IRS has a pretty good idea of how much it costs to be you.

Solution: Make sure your web of lies is at least mildly feasible. It doesn’t matter how many coupons you clip, don’t try and tell the IRS you’re supporting a SoHo loft and yacht-of-the-month habit on $25k a year.


Of course Gucci is deductible. Does the IRS really expect your clients to take you seriously in off-the-rack? That would be like trying to fix sinks without HBO! Look for these experiments in creative reasoning and more, coming soon to your Schedules A and C.

Solution: If you really think you deserve to deduct the flat-screen you use for FragFests/ “business meetings” on Xbox Live (MSFT), at least do your homework. Keep receipts, document personal vs. business use time, and generally treat each questionable write-off like a federal case. (Mainly because it could be.)


Despite the incessant neediness (Wait, food, shelter AND affection?), with up to $1000 in Child Tax Credit, who wouldn’t want kids these days? Luckily for some, there was a time when the IRS didn’t require social security numbers for dependents, allowing less scrupulous caretakers to write off children without them actually having to, um, exist.

Solution: Too bad this loophole was firmly closed in 1987, famously leading to seven million children claimed in 1986 magically disappearing forever. Whoops. Anyway, you can still make little tax write-offs the old fashioned way, with tools you may already have around the home.


We get it—you care about the IRS. Why force them to add and subtract scary numbers like $23,967 of additional income and $763 in charitable deductions, when $23,000 and $1,000 crunch so much easier? Any extra coin you save is just a pleasant bonus. As much as the IRS appreciates the thought, those big, round zeroes stick out like sore thumbs. Really lazy, sloppy sore thumbs.

Solution: Fuzzy math is almost as bad as the crappy variety. If you’re going to use fake numbers, at least make them interesting. We’ve always been partial to 723. Or, how about 9,321? Oh, and 865,432.45? Also, a good one. (No, we don’t get out much. Why do you ask?)


Even if you’re an Average Joe—i.e. not in a position to consider funneling money through your household staff in Bermuda or dealing with the headaches of a seven-figure Swiss Bank account—there are still plenty of people who want to help hide your money overseas. They usually advertise right between the penis enlargement pills and the deposed Nigerian princes.

Solution: Stay away from web scams–the bottom of the mattress is just as tax-free. Even for the uber-wealthy out there, remember that not only do tax shelters cost America an estimated $10 billion a year; they also let Uwe Boll keep making movies.

So you’re self-employed–how much of your home is actually a sweet, deductible work area? Well, you do pace, like, everywhere. And, God knows you’re always thinking about work. Hell, might as well just write off the whole house, right? These fuzzy, poorly defined gray areas are like red flags to a bull, if that bull really enjoyed auditing things.

Solution: “Exclusive use” is the IRS buzz phrase of choice. Any portion of the home you deduct means that you should be ready to prove that working is all you do there. We’re not saying the IRS cares about your bi-daily twelve minutes of, um, personal Internet time, but better safe than sorry.


So, you ignored our sage advice, and now the IRS is knocking down your door, demanding written proof of that $20,000 in goods and services you gave to African orphans last year. Nothing a six-pack of beer, your geeky nephew, and a copy of Photoshop (ADBE) can’t fix? Right? Maybe, but there’s no quicker admission of guilt (or faster route from civil suit to hard time) than trying to cover your tracks.

Solution: Don’t panic—an organization devoted to taking your money now must choose between exacting a financial penalty or shouldering your room and board for the next eight months—any thoughts on their first pick? Comply, smile wide, and hope for the best. It was good enough for Al Capone, right?

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