When a co-worker finally gets caught

[Unidyne]

(Sidenote: Before I posted this, there were 1,040 topics in this category.)

I've been informed that a co-worker has apparently not filed a tax return in 5, maybe even 6 years and has no Federal taxes taken out of his paycheck (This is Nevada, which has no state income tax). I mentioned this to him in passing and he rather crudely stated that the IRS could go screw itself. End of discussion.

Telling him that he's playing with fire is pointless, so showing him the HereIsTheLaw.com website is not an option.

So, when the IRS finally does come knocking on his door, what actions should I tell him to take, besides finally paying the damn taxes?

[Lambkin]

Why tell him anything? He can just enjoy consequences, if and when they come knocking.

I'm sure he knows tax attorneys and accountants are in the phone book.

[LPC]

What to do when the IRS comes "knocking on the door"?

It's standard emergency survival technique:

1. Remove all sharp or pointed objects from your pockets or person, as well as eyeglasses.

2. Loosen your clothing around the neck and wrists.

3. Find a comfortable sitting position, and lower your head to between your knees.

4. While you're there, kiss your sweet ass goodbye.

[.]

a co-worker has (...) no Federal taxes taken out of his paycheck

Might be a question to direct to your employer. Zero withholding on someone who would normally be subject to withholding is usually due to a bogus W-4 claim of X dependents or $Y of anticipated itemized deductions and/or credits, or a bogus claim that no tax was due last year and none is expected to be due this year.

A proclamation that "the IRS could go screw itself" is probably not indicative of a previous good-faith effort to accurately complete his W-4.

While there don't seem to be any sanctions available against an employer who accepts a bogus W-4 (other than perhaps possible heightened IRS scrutiny in the future,) the average legitimate employer doesn't want to be involved with any of his BS or its possible repercussions.

Or, you could, as a helpful friend who is worried that he might be getting his incredibly stupid ass in big trouble, refer him to this:

You may have to pay a penalty of $500 if both of the following apply.

* You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld.

* You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4.

There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both.

These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. (emphasis added)

http://www.irs.gov/publications/p505/ch ... nk10007264

Or, you could, perhaps most effectively, inform him that the IRS pays money for information about tax fraud if someone calls 1-800-829-0433 (never mind that it usually takes many years to get paid for a tip, what this idiot doesn't know won't hurt the impact of this newly acquired fact and threat to his scam) and you heard that some other co-worker was thinking about doing so.

There are many ways to mess with his feeble mind.

[Number Six]

Very unlikely the IRS would pay you a finder's fee for turning him in unless you have evidence, and if he has told you likely he has already informed on himself to others. Some day soon the other shoe will drop, and he will get called at work or home, or get increasingly demanding letters. Probably before then he could be fired in that right to work state. I'm sure there are dozens of people who would be glad to do his job, pay their fair share of taxes, and with a better attitude.

Whatever his tax cheating method is, there is a solution if he will address the problem before it becomes serious. If he is inflating deductions, he needs to amend that soon and pay the difference. Some war tax resisters recommend that, not something Henry Thoreau would do ("I do not want to be considered a member of a society that I have not joined").

If he is a non-filer like millions of others and has not heard from the tax authorities, he should go back at least three years--if he were self-employed, he would not get credit for social security taxes paid more than three years.

[Burzmali]

I know the government is slow, but this never fails to boogle the mind. After 5 years, his guy's tab to the IRS will probably reached 6 figures once penalties and interest are added. In reality, they guy's liquid assets probably don't even add up to a fraciton of that, meaning the the IRS will have to spend even more time and resources squeezing blood from this turnip.

[Kestrel]

So, when the IRS finally does come knocking on his door, what actions should I tell him to take, besides finally paying the damn taxes?

I wouldn't tell him anything (see my sig line). I WOULD tell someone else, if I had legitimate access to enough information on the fool:
www.irs.gov - How Do You Report Suspected Tax Fraud Activity?

Then I'd reserve tickets to watch the entertainment. Could take a while, tho.

They may already be on to him. If the IRS filed substitute returns and is sending him notices to pay up, and he doesn't respond, the employer will get a wage levy notice soon enough. Those levies are pretty harsh. Generally, you get to keep your standard deduction; everything else gets confiscated. Bankruptcy won't be an option unless he sees the light and files his tax returns.

[Cathulhu]

Burz, I think the word you want is "boggle", as in "mind-boggling".

[Burzmali]

Burz, I think the word you want is "boggle", as in "mind-boggling".

Typos are just a slight side effect one suffers from undergoing the brain rending experience of trying to wrap your mind around the glacial pace of the US government (except for when cupcakes are involved).

[grixit]

BOOGLE, v: to induce a sense of consternation through the reading of web search results. Example: if you look up the arguments of self proclaimed tax avoidance experts, you'll be boogled.