So the New York Times is offering tips for tax cheaters. Guess we know which newspaper will be audited next—but for now, let's take advantage of the paper's survey of 20 tax lawyers, accountants, and policy wonks:
- The easiest way to cheat is ... running your own company—or, more specifically, being the sole proprietor of a Schedule C business. Such tax filers write off tons of personal expenses and payments to family members (even to "infant children," says one CPA).
- The biggest cheaters are ... those who underreport income. And people get creative about it. For example, gambling winnings are taxable, but losses are deductible—so some gamblers exaggerate their losses by going to the track to "pick up tickets for losing bets that would be thrown on the floor," says one expert.
- The most idiotic attempted deduction is ... well, hard to say, there are so many. How about gym memberships, country-club dues, and cosmetic surgery. Then there's the actress who tried to deduct thongs.
- The biggest red flags for auditors are ... travel and entertainment expenses. But if you're not rich, don't worry: $1-million-plus earners are 11 times more likely to get audited, and those making $250,000 are 4 times more likely.
For more tips—including a spotlight on the most ridiculous loopholes—
click here. (More
taxes stories.)
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