Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Search for Jobs

Index Last Change % Change
Dow 20,701.50 150.52 0.73%
Nasdaq 5,875.14 34.77 0.60%
S&P 500 2,358.57 16.98 0.73%
Treasuries 2.41 0.04 1.52%
Data as of 11:41pm ET
Company Price Change % Change
Bank of America Corp... 23.48 0.45 1.95%
Ford Motor Co 11.65 0.19 1.66%
Chesapeake Energy Co... 5.39 0.23 4.46%
Advanced Micro Devic... 13.69 -0.01 -0.07%
Apple Inc 143.80 2.92 2.07%
Data as of 4:00pm ET
Sponsors

Sections

A top banking regulator cited the "egregious nature" of "discriminatory and illegal" credit practices at the bank, while downgrading Wells Fargo's community lending rating on Tuesday. More

The House voted to repeal Internet privacy protections. The future of online privacy is now in President Trump's hands. More

Some Millennials are looking to invest in rental property as a way to create their own pension in retirement. It could be a good approach for those who have already invested in the stock market. More