How To Cheat On Your Taxes – And Get Caught

What are some surefire ways to get the Internal Revenue Service on your back?

An April 3 piece published in the New York Times Magazine offered some pointers on how to get noticed by the IRS.

According to the piece, your best shot at getting attention is being rich.

“Those with income of at least $1 million are 11 times as likely to be audited as the average taxpayer; those with incomes of $200,000 or more are four times as likely,” according to the NY Times Magazine article.

Most of us aren’t rich, so how else can we woo the IRS? Liberally write off travel and expenses.

“Because people are aggressive about writing off travel and entertainment expenses — and because regulations for deducting T. and E. expenses are Byzantine — this is low-hanging fruit for auditors,” the article stated.

Other write-offs sure to catch more than a fleeting glance from the gray suits: gym memberships, country-club dues, cosmetic surgery, a wedding, thong underwear (applies to taxpayers who consider unmentionables requisites of professional career attire), and veterinary bills (for those who try and claim Itchy and Scratchy as dependents).

What’s the easiest way to cheat and get away with it?

As Greg Kyte, a Utah C.P.A., told the magazine: own your own company.

“You can look through your receipts for the year and say, ‘Here’s some stuff I bought at Home Depot,’” – the IRS will never know whether it was for home or business, said Kyte, who adamantly denied ever doing such a thing.

Schedule C filers can also write off payment for work done by family members.

“I’ve seen people with infant children claiming that their kids are doing work,” Howard Rosen told the magazine. A St. Louis-based C.P.A., Rosen added, “I’m talking about a 3-year-old doing filing. He didn’t even know the alphabet.”

According to the magazine article, there were more than 20 million Schedule C returns filed in 2009, with receipts of more than $1.2 trillion.

If you do own your own company, however, don’t get too big lest you want to forego your cheatin’ ways.

“Of the 1,000 biggest U.S. companies, more than half are being audited at any given time,” Mary B. Hevener, a partner at Morgan, Lewis and Bockius in Washington, told the magazine. The I.R.S. is drawn to giant corporations “for the same reason Willie Sutton robbed banks,” Hevener said. “It’s where the money is.”