Infographic: Over the Top: Tax Cheats, Fraud and Avoidance in America

Source: Online Accounting Degrees

 

$3.09 trillion: Estimated collective cost of tax evasion over the last decade in U.S.
$5 billion: amount a year lost from fraudulent tax refund claims.
How the Tax Burden Grew
1700s and before: Americans paid little or no taxes
1797: First estate tax passed then repealed
1909: Corporate income tax
1913: the first federal income tax (to help finance WWI): Tax rates were the same for everyone.
• 1 % tax: on income 0-$20,000
• 2%: $20,000-$50,000
• 3%: $50,000-$75,000
• 4%: $75,000-$100,000
• 5%: $100,000-$250,000
• 6%: $250,000-$500,000
• 7%: $500,000 and above
Compare to 2013 (married, filed jointly…before deductions)
• 10%: 0-$17.850
• 15%: $17,850-$72,500
• 25%: $72,500-$146,400
• 28%: $146,400-$223,050
• 33%: $223,050-$398,350
• 35%: $398,350-$450,000
• 39.6%: $450,000 and up
1916: Modern estate tax enacted
1924: gift tax
The 1920s and ’30s: Sales taxes enacted first in West Virginia in 1921, then in 11 more states in 1933 and 18 more states by 1940.
Today: Alaska, Delaware, Montana, New Hampshire and Oregon are the only states without a sales tax.
1935: Social Security Act signed in 1935; Social Security taxes first collected in January 1937
Other Taxes (vary by state): cigarette and alcohol taxes, energy taxes, aviation taxes, property taxes, telecommunications taxes and state income taxes.
146 million: number of individual and corporate tax returns filed in 2012
Avoidance, Evasion and Fraud
Cities the IRS considers high risk for tax fraud
• Tampa
• Atlanta
• Birmingham, Alabama
• Chicago
• Los Angeles
• Miami
• New York City
• Phoenix
• Tampa
• Washington D.C
10 most ridiculous attempts at tax write offs (Guess which one was accepted by IRS as legit)
• Sperm donation
• Witchcraft
• Free beer
• Bribery’
• Fallout shelter
• Sex toys
• Clarinet lessons
• Breast implants
• Navajo healing ceremony
• Cat food
[Answer: #3. Tax write off for a beer company allowed by irs]
Corporate Tax Avoiders (in business, it’s all legal)
• General Electric
• $81 billion in profits over last five years
• 0 taxes paid. $3 billion refund
• Verizon
• $48 billion in profits
• 0 taxes paid
• Kraft Foods
• $13.5 billion in profits
• 0 taxes
• Dow Chemicals
• $11 billion in profits
• Received a refund
• All State
• $3 billion
• 0 taxes, received a refund
The Dirty Dozen Tax Scams of 2013
• Identify Theft
• $20 billion: amount of fraudulent refunds prevented by IRS in 2012
• Phishing
• Return Preparer Fraud
• Hiding Income Offshore
• The IRS has collected $5.5 billion so far from people who participated in offshore voluntary disclosure programs since 2009.
• “Free Money” from the IRS & Tax Scams Involving Social Security
• Impersonation of Charitable Organizations
• False Inflated Income and Expenses
• False 1099 Refund Claims
• Frivolous Arguments
• Falsely Claiming Zero Wages
• Disguised Corporate Ownership
• Misuse of Trusts
Celebrity Tax frauds (they did it their way…and then got caught)
• Walter Anderson, Telecom exec. $200 million in back taxes owed.
• Dionne Warwick, pop singer, owed $2.7 million
• O.J. Simpson, notorious football player, $1.44 million
• Marc Anthony, pop singer, $2.5 million
• Willie Nelson, the poster boy of tax evasion, $16 million
• Wesley Snipes, actor, $17 million
• Al Capone, crime boss, did not pay taxes, went to jail
• In 1931, ordered to pay $231,000 in back taxes. That’s $3 million in today’s money
• Lionel Richie, pop singer, $1.1 million
• Lindsay Vonn, skier, Tiger Wood’s girlfriend, $1.7 million
• Leona Helmsley, hotel owner, falsely claimed $2.6 million in expenses
• Once said, “only the little people pay taxes”
• Sammy Davis Jr., singer (Rat Pack), owed more than $7 million when he died
• Spiro Agnew, vice president, laundered money
Think YOU have it bad? Top 5 countries with highest taxes:
Belgium
2012 top rate of income taxes: 50%
Effective tax rate on $100,000: 47% (13.1% Social Security, 33.9% income tax)
World rank on effective tax rate of $100,000: 1
Italy
2012 top rate of income taxes: 43%
Effective tax rate on $100,000: 45.2% (9.6% Social Security, 35.6% income tax)
World rank on effective tax rate of $100,000: 4
France
2012 top rate of income taxes: 45%
Effective tax rate on $100,000: 42% (22% Social Security, 20% income tax)
World rank on effective tax rate of $100,000: 8
Denmark
2012 top rate of income taxes: 55.4%
Effective tax rate on $100,000: 42.3% (0.2% Social Security, 42.1% income tax World rank on effective tax rate of $100,000: 6
Greece
2012 top rate of income taxes: 45%
Effective tax rate on $100,000: 46.5% (16.5% Social Security, 30% income tax)
World rank on effective tax rate of $100,000: