There was a recent post on lesswrong, which also got highlighted on AC10, that struck my interest. It claimed that he had been avoiding taxes for 20 years through "one simple trick:" filing, but not actually paying them. The idea is that the IRS is so small and incompetent that they basically won't do anything against this sort of passive resistance.
Is this too good to be true? I'm not any sort of "effective altruist," I just don't want to pay taxes. And as it happens, I have a lot of capital gains income this year. According to the rules, I'm supposed to write the IRS a big check by Jan 15 for "estimated taxes." I can afford it, but it would make my life better to keep that money for myself. Can I just... not...? This feels like a real Matrix, red pill moment-
"You're telling me that I can dodge taxes?" "No. I'm telling you that when the time comes- you won't have to."
Then again... I really, really don't want to go to prison. even just getting my passport suspended would be a major hassle. And the guy who wrote that post seems like a real hippy... no bank account and no salary income??? how does he live?
Perhaps it would be better to set up a shady small business and claim all sorts of vague tax deductions. Thoughts on this?
btw: long time lurker, first time poster. I'm asking here because you seem like people who are smart, outside-the-box, and not simps for the government.
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They certainly are. And its not even 10 minutes. They are literally just filling out a standard form. They are up on their game when they think you underpaid. That letter comes out swiftly. And if you don't pay or contest the next step isn't much more for the IRS.
Do you have any personal experience with this? Because what you say directly contradicts the post I linked and what I've heard about the IRS in general.
I was a 1099 contractor, at least, in part, for many years. If I ever reported less income than the counterparty I'd get a letter giving me XX days to respond. I always did contest, because I am not a goober. But then they dedicated hours of work to following up with both parties over typically $500-$1000 in income, which means some low hundreds amount in revenue. On top of that, a few years ago my wife, then fiance, got improperly claimed for like $5000 in 1099 income, from a company that somehow got her SS #, but was from another state. We sent at least 10 correspondences on that, spent at least 8 hours on the phone and the agent ultimately had to, at least pretend to read hundreds of pages of bank and credit card statements on top of whatever they got from the fraudulent counterparty claiming it paid out 1099 income. So, it seems to me, they are perfectly willing to chase ghosts over a few hundred speculative dollars. Why wouldn't they be willing to issue a garnishment order which takes 4 minutes and is guaranteed to net them those hundreds/thousands?
Cool, that's the kind of experience I was looking for. That does make them sound a lot more competant than I expected.
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