How do people get away without paying taxes?

Question

I pay taxes. And I do not think that it is fair that others don't pay them and live the high life. While we pay taxes!

For instance...

I have a uncle who owns his own business and makes money under the table. He has been doing it for over ten years. And all of those years he has not been paying taxes and I just wonder how he is able to get away with something like that. From what I know you will go to jail if you do something like that. But he hasn't. He puts money in his bank account. And buys houses and everything. And the IRS has not did anything to him yet. How is he able to do this?...I know that they have been watching his bank account and knows he has bought all of these houses and stuff?

Someone told me that as long as you limit how much money you put in your bank account the IRS cannot say anything. I think under $10K each month at a time. Is this true? As long as you limit the spending?

I think that if you dont pay taxes you will not have any social security pennies in and when you get old you wont have anything. And that you will never be able to file income taxes yearly!

Answer 1

He hasn't gotten caught - yet.

Not true that the IRS can't say anything if you don't put large sums into your account at one time.

But yes, it is true he won't be getting social security benefits.

Answer 2

The truth is, a lot of people think others are getting away with things that they are not actually doing.

In your case, I'd bet your uncle IS paying taxes.

If someone does not pay taxes, they will eventually slip up.  No, the IRS does not watch bank accounts, that is an unconstitutional search.  However, once they receive valid information on a crime (like evading taxes), they can and WILL go back and search all your accounts.

People do occasionally get away for some time without paying, but one day, the IRS will come knocking, and at that point the fines and jail time will more than make up for the temporary advantage of cheating.

Answer 3

You are astute in your observation regarding Social Security.  An acquaintance of mine did the same thing and thought he was really smart.  Ha!  He got the minimum you can get with SS and had almost no money at all.

The banks aren't required to report deposits under $10,000 to IRS but that doesn't mean IRS can't investigate and catch someone cheating.  In time they may track another miscreant back to your uncle or something else may throw up a red flag.  Someone may report him (for which they may earn a reward).

It is sad that some people just love to cheat.  They just have no integrity.  Others are wise to shun business dealings with them.