A Few Good Reasons Why You Should Pay Your Taxes

Last week I wrote about what bills you should pay first, and taxes were near the top of the list. Uncle Sam wants his money, and as much as we hate giving it to him, it is important to not only pay your taxes, but to pay the right amount. The latest edition of On Wall Street magazine published some IRS statistics that illustrate why it is a good idea to keep up with your taxes.

IRS Criminal Investigations for Fiscal Year 2007

  • Investigations Initiated: 3,204
  • Prosecution Recommendations: 2,107
  • Information/Indictments: 1,818
  • Total Convictions: 1,620
  • Total Sentenced: 1,592
  • Percentage Sent to Prison: 80.4%
  • Average Months to Serve: 41

So, there you have it. If your taxes are simple, just make sure you pay them. If you have more complicated tax issues or own a business, it can pay to hire someone to help make sure you’re doing them right. It doesn’t pay to try and cheat the system.

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

12 comments
Jeremy
Jeremy

Nora, I actually just made a post about this earlier today. When Do You Need to Mail Your Taxes?

Nora Dunk
Nora Dunk

Di i have to pay my taxes by 4-15-08 what if i dont. ? Nora Dunk

Nora Dunk
Nora Dunk

? what is the latest day to pay your taxes,without penalty, Is it April 14th 08. Thanks.Nora Dunk

George
George

There's a question of resources when it comes to tax collection - the government has virtually unlimited resources to collect the taxes you owe, and you have very little in the way of resources to a) fight the system or b) hide from the system.

It's much easier (on the pocketbook and the mind) to pay taxes when they are due, and not worry about the government breathing down your neck.

Winterman Asset Management
Winterman Asset Management

Take a look at the latest UK assault on tax. The HMRC have said that they have 'elite inspectors' looking for people with offshore bank accounts. After putting togather an amnesty for people to declare their accounts, 50,000 people gave up their offshore information.... I know you guys have it bad with the IRS and their strict rules, but this is one US export that we could have done without!

Ed
Ed

So only 1280 people were sent to prison in a whole year for tax evasion? Out of a hundred million tax filers?

Sounds like cheating on your taxes is safer than driving down the highway.

icup
icup

Doesn't 3204 investigations out of about one hundred million returns filed kind of suggest though that there is a very good to excellent chance of getting away cheating on your taxes though? And only 50% of those investigated actually get convicted, and only 80% of THOSE actually see jail time over it. This suggest to me that the IRS only goes after the 'sure conviction' or really egregious offenders, so as long as you don't do anything ridiculous, cheating the government out of a few hundred dollars is probably a pretty safe gamble.

Not that I would do such a thing mind you, I'm just think the numbers are not that impressive if you stop to think about them.

Starving Artist
Starving Artist

I'm horrible about doing my taxes on time, but I usually try and pay a little more during the year so I don't get stuck with balance due.

Love the blog, by the way!

jolinekacie
jolinekacie

I agree that the government won't forget about you even if you are near the bottom of the food chain! LOL I always every single year procrastinate about paying taxes and every year, after I get done realize that I should bite the bullet and do it sooner. I used TurboTax last year and have left the link on my toolbar to make it that much easier to go back and do it this year. Being single my taxes really are easy to prepare and I qualified to do them free online with this program.

Patrick
Patrick

I think it's great there is such a high success rate for tax offender convictions. Unfortunately, it costs every tax payer a lot of money to do this - we end up paying for the investigations and ultimately the jail time. Still, these people are thieves and brought it upon themselves.

The Financial Blogger
The Financial Blogger

bottom line, you will have to pay your taxes at one point or another. The Government won't give up on you. Then, if you delay your payment, the only thing you will receive in return is financial penalties and interest charged on the tax owing. Definitely, it's a must to pay your taxes!

David
David

Not to mention any financial penalties.