Wednesday, January 30, 2008

The Tax Evasion Scheme Explained

Part One
During a department investigation, it was discovered that from 2003 through 2005 a couple allegedly received over $140,000 of taxable income that was not reported to the State of Minnesota. According to the complaint, the couple owes the state at least $9,750 in income tax for those years.

William McCann allegedly admitted that he had been doing remodeling jobs since 2002 and had received $25 an hour, even though he is not a licensed contractor in Minnesota. He admitted to running a lawn sprinkler service for the past four years as well. The income he received from both of these jobs was not reported on the couple’s tax returns.

Patricia McCann allegedly acknowledged that she knew her husband was involved in remodeling and construction projects, and that the money was put into their checking accounts, but was not reported on their individual income tax returns. She also admitted to failing to report that she had received $225 per week for house cleaning services since April 2003.

Click here for the full article.

Part Two
The I.R.S. estimates that as many as four million people owe payroll taxes (known as nanny taxes) each year, that means that fewer than 1 in 13 are obeying the law.

"My accountant told me I have to stop this and issue paycheck stubs and report what I pay to the I.R.S.," said Elaine, a divorced 42-year-old mother of two who covers Hollywood for a magazine and asked that her last name not be used. "But since no President is ever going to nominate me for the Cabinet, what do I care about paying this stupid nanny tax? And if I get caught, I'll just pay the fine and go on doing what I am doing."

So why should you care?

Maybe this statement will hit home with you.....

The law requires anyone who pays a nanny or other servant more than $1,100 this year to report those wages to the I.R.S. Assuming that only one in thirteen is doing so - and that the tax evaders spend as much on household help as the upright citizens do -the Federal Government is losing $1.2 billion a year in Social Security and Medicare taxes.

Click here for the full article.

Part Three
And why should this statement mean anything to you....

1. Because your salary gets whacked because of these payroll taxes. If you have to pay them, why shouldn't everyone else?

2. Because your housecleaner is a thief. She's stealing from your government. And if she'll steal from your government, she might steal from you.

3. Because you're stealing from your government too. And that can't make you feel too good about yourself.

No comments:

Post a Comment