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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsReport: Richest Americans don't report at least 20% of income to IRS
The richest Americans don't report at least 20 percent of their income to the IRS, new research suggestsPeter Weber
Yahoo.com, March 22, 2021,
The richest Americans dodge much more in income taxes than the Internal Revenue Service previously assumed, according to research being published Monday by IRS and academic researchers.
The top 1 percent of U.S. households don't report about 21 percent of their income, and a big slice of that 6 percentage points is from sophisticated tax-avoidance strategies that aren't detected in spot IRS audits, The Wall Street Journal reports. The top 0.1 percent of households may hide nearly twice the amount of income projected by conventional IRS methodologies, the researchers found.
The main drivers of this tax avoidance by the super wealthy are hiding money offshore and the increasing use of pass-through businesses like investment funds, real estate enterprises, closely held family firms, and other partnerships, the researcher found. In such businesses, income passes through an owner's individual tax returns and is not taxed at the corporate level, the Journal explains.
"There is more revenue than you might have thought at the very top," Daniel Reck of the London School of Economics, the paper's lead nongovernment author, tells the Journal. "What's needed is a broader strategy that involves increased scrutiny of pass-through businesses [and] investments in the comprehensive audits that the IRS does in its global high-wealth program." The research is being released by the National Bureau of Economic Research.
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https://news.yahoo.com/richest-americans-dont-report-least-054441854.html
We don't pay taxes. Only the little people pay taxes. Leona Helmsley
Indykatie
(3,691 posts)I have always done some consulting outside my regular job. I was paid using my SS number and a 1099 was sent to me and the IRS reporting the total I was paid each year. Each company that paid me more than $600 sent a 1099. I set up an LLC for the consulting work because I knew I would earn more money consulting after I retired in 2020. I learned in Jan that since I used a TIN and not a SS number for payments no 1099 would be issued to me or the IRS leaving it up to me to add my consulting pay when I filed my taxes. I was paid $84K by my main client and not a penny of that money was reported to the IRS. This is a huge opportunity for folks to cheat on their taxes by failing to report all income. I bet that happens a lot.
Kid Berwyn
(14,650 posts)...are the high net worth individuals and the corporations.
Super rich hold $32 trillion in offshore havens
By Reuters Staff, July 22, 2012
LONDON (Reuters) - Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens, representing up to $280 billion in lost income tax revenues, according to research published on Sunday.
The study estimating the extent of global private financial wealth held in offshore accounts - excluding non-financial assets such as real estate, gold, yachts and racehorses - puts the sum at between $21 and $32 trillion.
The research was carried out for pressure group Tax Justice Network, which campaigns against tax havens, by James Henry, former chief economist at consultants McKinsey & Co.
He used data from the World Bank, International Monetary Fund, United Nations and central banks.
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https://www.reuters.com/article/us-offshore-wealth-idUSBRE86L03U20120722
Im looking for more recent information. For some reason, there isnt much follow up to these studies.
TexasBushwhacker
(20,043 posts)I've been a bookkeeper over 20 years and currently work under a CPA.
1) Lots of people who buy a car through their business primarily use it for commuting.
2) Lots of people who claim business meals are counting their personal meals. Thankfully even business meals are only 50% deductible.
3) Lots of people in sales deduct the cost cosmetic procedures like Botox and laser treatments, because their "image" is part of their job. Some write off designer clothes as well.
4) And then there are the people who primarily deal in cash. They claim their expenses they pay in cash, but don't send out 1099s because "it's cash. No one reports that!" So not only do they not report their cash income, the people they pay cash don't report their cash income either. We dropped a client because she was doing this.
Kid Berwyn
(14,650 posts)The real story comes and, as the media are owned by the rich swells, is left to pass into history.
The International Consortium of Investigative Journalists are giving this the old college try.
Panama Papers
Paradise Papers
Implant Files
Luxembourg Leaks
FinCEN Files...
https://www.icij.org/investigations/
Explains why the GOP makes friends with Putin and the oligarchs.
sarcasmo
(23,968 posts)Kid Berwyn
(14,650 posts)Regarding the offshore...
Lucy Komisar did pioneering research:
https://www.thekomisarscoop.com/about/
Regarding the tax dodging, from about five years back...
Massive leak exposes how the wealthy and powerful hide their money
https://upload.democraticunderground.com/?com=view_post&forum=1002&pid=7736046
And from 2013...
The $32 Trillion Hidden Offshore Needs IRS Attention.
https://www.democraticunderground.com/10023378455
From 2008, when the GOP and Friends looted the banks:
Know your BFEE: Phil Gramm, the Meyer Lansky of the War Party, Set-Up the Biggest Bank Heist Ever.
https://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4055207
Once they were easy to find. Seems the Googles algorithms have changed...