Your Money

Will Sky Fall If I Don't Pay Taxes?

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Taxes were due this week. Ever wonder what might have happened if you just hadn't filed this year? Host Scott Simon consults Slate magazine political reporter Christopher Beam.

SCOTT SIMON, host:

Taxes were due this week. Come on, now, admit it, sometimes as you've stood in the long line or crunched numbers late at night, haven't you wondered, so, what would happen if I don't file? Would the sky fall? Would Wyatt Earp come looking for me? Christopher Beam, political reporter for Slate magazine has looked into all of this. He joins us from the offices of Slate. Christopher, thanks for being with us.

Mr. CHRISTOPHER BEAM (Political Reporter, Slate Magazine): Thanks for having me.

SIMON: Before I ask my first question, I just want this on the record: all staff members here at WEEKEND EDITION have paid their taxes, not only on time, but months in advance. And I don't mind telling you. Even threw in, you know, just a little extra so the IRS examiners can have a nice lunch after tax season. But hypothetically let's say somebody hasn't filed this year, what are the chances they'd get caught?

Mr. BEAM: Well, the chances are extremely low. There's about a two percent chance - everything else being equal - that you'll be audited by the IRS. Those chances are especially low if you're self-employed. So, if you're a musician who makes $200 every night and it's all in cash, there's very little way for the IRS to come after you.

SIMON: So, if you're self-employed, there's perhaps even more than a 98 percent chance nothing will happen.

Mr. BEAM: Yeah, I think you would be pretty much guaranteed not to be audited. The problem is that's just for now. Down the line, there's plenty of opportunities for the IRS to come after you.

SIMON: Yeah, particularly if you have a conspicuous amount of wealth. At some point, somebody drops a dime on you.

Mr. BEAM: Exactly. If you want to make money in the future, chances are you want to have a clean past with the IRS. If you want to work for the IRS, you need to have a good record, 'cause they will audit you all the way back. And also, if you want to go into politics, we learned from our friend Tim Geithner that it helps to have a clean record.

SIMON: Every time at tax season I hear at least one person interviewed who is identified as a conscientious objector when it comes to paying taxes. They just don't file. They don't pay their taxes. Can they get away with it?

Mr. BEAM: They can, but that doesn't mean they will. A really prominent case recently was Wesley Snipes, who apparently was a conscientious objector. He refused to pay taxes on $38 million in income over four years. And what he said was that he didn't know that he had to pay taxes. I'm not sure that's true, but that helped him avoid getting found guilty of tax fraud. But they still charged him with three misdemeanors for failing to file his tax returns.

SIMON: There's a famous old Chicago politician now gone who didn't file income tax for many years. And I remember being told by prosecutors that he was smart enough to know that the penalties for not filing are not as severe as they are for filing a false return.

Mr. BEAM: I think the reason for that is that if you don't file it at all, you can claim - true or not - that you didn't know. Whereas if you file it falsely, it's much harder to show that you innocently made a mistake.

SIMON: So, without putting you on the spot, were you scrupulous about your taxes this year?

Mr. BEAM: Extremely scrupulous because I knew I would be writing about it.

(Soundbite of laughter)

SIMON: Christopher, thanks so much.

Mr. BEAM: Thanks for having me.

SIMON: Christopher Beam, political reporter for Slate and a very honest man.

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