WSJ Your Money Briefing
Yes, It’s Still a Bad Idea to Cheat on Your Taxes
Apr 8, 2025
Tax reporter Laura Saunders sheds light on the heightened risks of tax cheating in today's climate. She explains how the IRS is using advanced technology to catch filers who inflate returns, and why tax evasion is not worth the gamble. The conversation highlights shifting attitudes among tax preparers, as clients push boundaries on omitting information. With penalties rising and the cost of getting caught escalating, honesty in tax reporting is more crucial than ever.
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Quick takeaways
- Despite perceptions of reduced IRS enforcement, the agency has robust data systems to detect tax discrepancies and fraud.
- The increasing penalties for tax evasion, including high interest rates and significant fines, make cheating a financially risky decision.
Deep dives
Increased Risk of Tax Cheating
Many individuals are tempted to cheat on their tax returns in the current environment, particularly due to a perception that reduced IRS enforcement may allow them to get away with it. Tax preparers report a notable increase in clients asking whether they need to declare certain income or whether expenses can be exaggerated, leading to a growing tension during the filing process. This mindset arises partly from the recent layoffs within the IRS, causing some to feel that the agency may be less vigilant this year. However, tax professionals emphasize that even with fewer resources, the IRS has effective systems in place to catch discrepancies through data matching from various income reports.
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