Are you a tax cheat?

Blake Ellis, staff reporter


NEW YORK (CNNMoney.com) -- Do you cheat on your taxes? If so, you're not alone. More Americans are fudging their taxes and an increasing number of people are scared of being audited, a survey from the IRS Oversight Board shows.

Thirteen percent of those surveyed said cheating is acceptable, according to an annual poll conducted for the Internal Revenue Service Oversight Board. That's up 4% from 2008. Four percent of Americans said they cheat on their taxes "as much as possible," up 1% from the year before.

Do you cheat on your taxes?
  • Not at all
  • A little here and there
  • As much as possible

As tax season approaches this year, even more people may resort to cheating.

"I think the temptation will be greater this year, given the overall economic environment," said Bob Kerr, senior director of government relations at the National Association of Enrolled Agents.

But it's still impressive that more than 80% of those surveyed said they don't think it's ever acceptable to cheat, said Kerr.

How people cheat: As the government offers more refundable credits to taxpayers, such as the Making Work Pay Tax Credit, people may be tempted to try to claim more money than they deserve.

"We're getting more refundable credits," said Mark Luscombe, a tax analyst at CCH. "Historically, when you're able to get a check from the government in your hands right away, this has brought more cheaters out of the woodwork."

Besides common cheating tactics such as inflating the value of charitable donations and claiming personal expenses as business expenses if you're self-employed, Luscombe said a number of "cheaters" are simply those people who can't decipher the complicated tax code.

"People can't figure it out so they just put down a number that seems pretty good to them," he said. "The laws get more and more complicated each year and people just have less time to figure out the right way to do it so they might try to cut some corners."

Scared of getting audited: When asked if the fear of an audit plays a role in whether or not a taxpayer reports his or her taxes "honestly," 77% of Americans said yes, according to the poll.

That shouldn't be a surprise given the higher likelihood that you will be selected for a review. Last year, the number of audits rose to the highest level in a decade, and even more audits are expected this year as the Obama Administration pours money into tax enforcement.

A hotline was created to prevent cheaters from slipping past the IRS. Anyone with information about suspected tax fraud is encouraged to report it to the agency's tip line at 1-800-829-0433.

"There's still only about a 1% chance on average that you will be audited," said Luscombe. "But the audit rate has headed back up in the last couple years so your chances are certainly going up." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 12,496.15 -6.66 -0.05%
Nasdaq 2,850.12 11.04 0.39%
S&P 500 1,318.86 2.23 0.17%
Treasuries 1.72 -0.07 -4.02%
Data as of 2:42am ET
Company Price Change % Change
Bank of America Corp... 7.17 0.19 2.72%
Dell Inc 12.49 -2.59 -17.18%
Ford Motor Co 10.41 0.22 2.16%
Microsoft Corp 29.11 -0.65 -2.18%
General Electric Co 19.18 0.00 0.00%
Data as of May 23
Sponsors

Sections

While Wall Street freaks out about an IPO it views as a disaster, the view of Facebook's rocky public debut is much sunnier in the tech trenches. More

More new homes being sold but still far below peak. More

Facebook's IPO has had big problems, but the biggest of which is the question of whether it was done legally. More

Health care tax credit, meant to help small businesses, has been called too weak and confusing. A recent report by the Government Accountability Office concurs. More

Quiet Kansas farm towns are quickly transforming into boomtowns as new technologies make drilling along the southern border of the state more attractive. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2012 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2012 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2012. All rights reserved. Most stock quote data provided by BATS.