In 2022, 8,143,000 federal tax returns were filed in which the filers failed to pay what the returns said they owed. There were also at least 413,000 taxpayers who failed to file returns (only counting the ones the I.R.S. knows about).[4] That same year, the I.R.S. successfully prosecuted 699 people for tax crimes of all sorts.[5] Even if every one of those prosecutions had been of people who merely refused to pay (or to file and pay), that would mean that an individual tax scofflaw would have had something like a 1 in 12,000 chance of being brought up on charges.
I have not checked your sources, but it sounds like the first number you are quoting is probably referring to the people who did not immediately pay their full tax when filing. Have I misunderstood?
My models predict that the subcategory of people who continued to not pay their tax unless/until criminally convicted is substantially smaller, and that charges are vastly more likely to be brought against this subgroup than against others. (The larger group also contains: people who made a honest mistake; people who are legitimately but temporarily unable to pay, and will pay when they can; people who can be intimidated into paying by scary letters; people who have assets that can be easily seized.)
This suggests to me that your “1 in 12,000” number may be a rather substantial underestimate for the risk within the scofflaw subgroup.
Yeah, it’s an imperfect first-stab calculation at best. But that doesn’t mean that 1 in 12,000 is necessarily an underestimate because while the 8,143,000 denominator may be exaggerated for the reasons you suggest; the 699 numerator is too, for the reason I gave (“even if every one of those prosecutions had been of people who merely refused to pay”). In fact, few to none of those 699 prosecutions were of people who merely refused to pay. An appendix to their report shows how many indictments the IRS pursued in a variety of categories (this adds up to more than 699 because some non-tax crimes e.g. narcotics, money laundering are also prosecuted via the same unit). Non-payment doesn’t even make the list:
I have not checked your sources, but it sounds like the first number you are quoting is probably referring to the people who did not immediately pay their full tax when filing. Have I misunderstood?
My models predict that the subcategory of people who continued to not pay their tax unless/until criminally convicted is substantially smaller, and that charges are vastly more likely to be brought against this subgroup than against others. (The larger group also contains: people who made a honest mistake; people who are legitimately but temporarily unable to pay, and will pay when they can; people who can be intimidated into paying by scary letters; people who have assets that can be easily seized.)
This suggests to me that your “1 in 12,000” number may be a rather substantial underestimate for the risk within the scofflaw subgroup.
Yeah, it’s an imperfect first-stab calculation at best. But that doesn’t mean that 1 in 12,000 is necessarily an underestimate because while the 8,143,000 denominator may be exaggerated for the reasons you suggest; the 699 numerator is too, for the reason I gave (“even if every one of those prosecutions had been of people who merely refused to pay”). In fact, few to none of those 699 prosecutions were of people who merely refused to pay. An appendix to their report shows how many indictments the IRS pursued in a variety of categories (this adds up to more than 699 because some non-tax crimes e.g. narcotics, money laundering are also prosecuted via the same unit). Non-payment doesn’t even make the list:
Abusive Tax Schemes: 35
Corporate Tax Fraud: 23
Financial Institution Fraud: 20
Bank Secrecy Act: 338
Employment Tax: 142
Healthcare Fraud: 69
Abusive Return Preparer Program: 112
Identity Theft: 88
Money Laundering: 701
International Operations: 143
Narcotics: 475
Non-Filer: 115
Public Corruption: 27
Questionable Refund Program: 51
Terrorism: 33