The IRS reports that unreported income in the United States is around $2 trillion annually, with a loss in taxes collected of between $400 and $500 billion each year. There are around 125 million workers who are employed on a full-time basis in the US, and if the cost of that tax fraud alone (and there are numerous ways to commit tax fraud, with unreported income being only one of them) were evenly split among full-time workers, that means each worker is paying around $3,500 extra a year to the federal government to cover the costs of unreported income by others. Some might argue that getting away with tax fraud only hurts the faceless bureaucrats at the IRS, but is that true? Absolutely not. The primary victims of tax fraud are workers and entrepreneurs just like you. Here are 5 ways (out of many) that unreported income and other forms of tax fraud hurt your bottom line, and a way you can fight back while winning a financial reward in the process.
Higher Tax Rates for You
Ever wonder why your tax rates are so high? Sure, there are plenty of government services and programs that are being paid for with your tax dollars, not all of which you may agree with, but one of the leading reasons your tax rate is high is to account for the fact that so many of your fellow business owners and income earners are not paying the taxes they owe. That tax revenue has to come from somewhere, and when the IRS cannot collect from tax cheats, Congress has to look to honest taxpayers like you for more taxable revenue.
More Cutbacks in Services You Depend On
That said, when there is not the political will to further raise taxes on honest taxpayers, the next step is to make cutbacks in government programs that you depend on, which shifts that burden to states, cities, businesses, and individuals. Whether it’s cutbacks in the military, funding for social programs, education, health care costs, or public infrastructure like roads and bridges, taxpayer fraud means you get less from your taxes from the government.
Your Customers Have Less Money to Spend On Your Business
Putting both of those factors above, it is not just you who has to pay higher taxes to the government to get even less back from the government when people cheat on their taxes, but it is your customers as well. With higher tax rates and more costs shifted to them, your customers have less money to spend on your business’ goods and services. Whether you are an owner or an employee, this often means less income for you.
Cheating Competitors Get an Unfair Advantage Over You
And who gains the windfall from all this? Those individuals and businesses who are the ones perpetrating tax fraud. They have more money to invest in their businesses and so they get an unfair advantage in the marketplace over honest taxpayers like you. When we have a system where unreported income and other forms of tax fraud goes unnoticed, then the cheaters win and the honest market players struggle.
Successful Taxpayer Fraud Encourages More Fraud
Taking this all a step further, undetected tax fraud rewards, encourages, and empowers bad players in the marketplace while penalizing the honest individuals and companies. As they gain more power and capital, they are emboldened in their fraud and a snowball effect can occur where it becomes more and more difficult for people of character to succeed.
How to Recover a Financial Reward While Protecting Taxpayers
But it doesn’t have to be this way. There is a way to fight back against tax fraud and level the playing field for honest players in our economy, all while recovering a substantial financial reward for yourself in the process for bringing IRS fraud to light. At Kreindler and Associates, we have over 15 years experience working with courageous individuals to help bring harmful tax fraud to light. We will work with you every step of the way to make sure your claims are properly presented, that your confidentiality is protected, and that you receive the recovery you deserve as quickly as possible.
If you have evidence of tax fraud or questions about how to report tax improprieties and receive a whistleblower award, contact us today and let Kreindler and Associates help you determine your best course of action.
