James Brown was right when he sang, "This is a man's world."
Well, he was right at least when it comes to the world of tax cheats.
It turns out the overwhelming majority of people who admit they would cheat on their income taxes are men, according to a fascinating study by DDB Worldwide Communications Group, an advertising and marketing firm.
In the survey of more than 6,400 adults, 15 percent of respondents said they are likely to cheat on their taxes. Of that group, 64 percent were men -- most of them single and under the age of 45.
"Men are probably less intimidated about the consequences of getting caught and believe more in their ability to talk their way out of a bad situation," said James Lou, DDB's chief U.S. strategist.
The potential cheaters said they would lie about their tax situation for the obvious reason -- money. Forty-two percent said they are one paycheck away from disaster. The survey also asked cheaters to describe their money style. Forty-five percent said they are spenders rather than savers. No surprise there.
Also not surprisingly, tax cheats admitted they would work a job under the table while getting unemployment benefits, keep the wrong change given to them by a cashier, file a false insurance claim and lie about their income to qualify for free government aid.
When people cheat on their taxes, we all pay. So, frankly, I was happy to see that the IRS is going after people making the big bucks, since their likely cheating adds up to a lot more dollars than the average tax scofflaw.
Newly released IRS statistics show that the agency has significantly increased its audits of the super rich. Audits of people with incomes of $10 million or more increased 73 percent from 2008 to 2009. For those making $5 million to $10 million, the increase was 54 percent. And for folks earning a mere $1 million to $5 million, the figure jumped nearly 25 percent. Audits overall were up 11 percent.
Still, there will be tax cheaters who won't miss an opportunity to test the system. Most recently, 14 individuals were charged with fraudulently claiming the first-time homebuyer tax credit. The charges stemmed from a joint effort that began in 2009 between the FBI, IRS, the Department of Housing and Urban Development, the U.S. Attorney's Office and state law enforcement agencies. The agencies were specifically targeting financial schemes related to the federal government's effort to stimulate the economy. As you may recall, in what I still think was a fiscally unwise move, first-time homebuyers for a limited time could get either an $8,000 or a $7,500 tax credit. Which credit people could take depended on when they purchased their homes.
A tax credit is much more valuable than a deduction. A credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable.
So I guess the homebuyer credit was just too good for many cheaters to pass up. Two individuals filed more than 50 returns falsely claiming the credit for the tax year 2008. They got more than $500,000 in refunds.
Among those charged was a longtime IRS employee, who authorities said fraudulently claimed to have purchased his home in 2008 in order to qualify for the credit, even though he purchased his home in 2007 and therefore wasn't eligible.
In February, a Georgia woman who worked as a seasonal employee for the IRS was indicted for using the IRS computer system to help four individuals claim the credit. She was allegedly paid $2,000 to change information in the IRS computer system to make it appear her friends and relatives were eligible for the credit, and now, if convicted, is facing a maximum of five years in prison for the computer fraud charges and a fine of up to $250,000.
"Congress created and modified the homebuyer credit to stimulate the economy and help taxpayers achieve the American Dream, not to line the pockets of wrongdoers," said J. Russell George, the Treasury inspector general for tax administration.
If you're thinking about cheating on your taxes, consider the following statistics: Non-narcotics-related tax crime investigations that led to prosecution referrals were up by almost 17 percent, according to the IRS. And if you're found guilty, well, you're going to serve some time. Unchanged was the roughly 80 percent of people who were sentenced and incarcerated.
Write to Michelle Singletary at firstname.lastname@example.org. Please note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.