Crazy Office Mate has a tax problem- any advice?

[Modem Butterfly]

Crazy Office Mate told me today that she doesn't pay taxes. She said she never started paying taxes, therefore, "they" don't know who she is, so she's not going to start paying taxes. I'm pretty sure this is a good way to go to jail. Anyone have any experience with this?

[Bill McBlueState]

1. Is she somehow not having tax withheld from her paycheck?

If she's having tax withheld like everyone else, she's definitely paying taxes and the IRS definitely knows who she is. :eyes:

[Modem Butterfly]

3. I'm sure she's paying withholding

Maybe her withholding is so high she doesn't rate on their radar screen?

[trotsky]

2. Will you miss her when she gets locked up?

If not, don't do anything! ;-)

If she's got a social security number, she WILL eventually be found. But by that time she might just be a million dollars in the red with late taxes, fees, and penalties.

[Modem Butterfly]

4. Scary thought. Isn't there a statute of limitations though?

I'm almost afraid to even talk to her about it. She's just nuts enough to tell the IRS that I'm the one who gave her tax advice.

[Beer Snob-50]

12. there is a statue of limitations (3 years)

unless, they suspect fraud and then all bets are off

[ISUGRADIA]

13. Are you sure about that? I have read there is no statute of limitations

on non-filed taxes (no return for a year).

[Modem Butterfly]

14. From the link provided on this thread, it's six years

The IRS has three years to hit you with extra taxes (ten years to collect on that money). The IRS has six years if you underreport your income by 25% or more. I guess failure to file would fall under that category.

[intheozone]

17. You are right, the statute of limitations doesn't start

running until a return is filed. If no return filed, the statute is stays open.

[intheozone]

18. But the 3-year statute begins

with the fililng of the return. If she isn't filing returns, her statutes are going to stay open on all years.

[Danocrat]

5. Unless she works under the table

the IRS will catch up with her in a few years. She'll find she owes them thousands of dollars and they'll tack on monthly penalties and interest until it's paid.

[benddem]

6. They do know her

she is either really naive or really dumb. Her SSSI and Taxes are taken out of her paycheck and attached to her social security no...and her name. Unless she is an illegal alien and is paid under the table...she needs to pay up.
She should contact someone with experience in this sort of thing. The tax man will come calling soon.

[Crankie Avalon]

7. What she probably means is she isn't filing returns...

...but she is probably having a withholding taken out of her check.

If she had filed, she might have found the withholding was too much and she would have been due a refund. Or, it would have been too little and she would have had to pay more.

Either way, she's doing something awfully dumb and STILL getting money taken out of her paycheck.

[radwriter0555]

16. It could well be that she is OWED a great deal of money too, wouldn't that

be ironic?

[skygazer]

8. Sort of

Years ago, both hubby and I worked at a racetrack where we were paid under the table. Eventually, he got a mainstream job and the first year he filed for taxes, the IRS wrote to him and asked him what he'd been doing for income the previous ten years since he was now 28 and had never filed.

As I recall, he wrote back telling them something - don't remember what - and he never heard from them again (we were divorced soon after so the details are fuzzy).

However, if she is working in a place that takes taxes out of her check, "they" know damn well who she is and it seems it would be just a matter of time before she got caught. Depending, of course, on whether she would end up owing or if they would owe her a refund. If enough is being taken out to warrant a refund, the gov't is making money off her.

[Nye Bevan]

9. She needs to go to the IRS before they go to her

from the IRS site

http://www.irs.gov/businesses/small/article/0,,id=122721,00.html

Will I Go to Jail?

A long-standing practice of the IRS has been not to recommend criminal prosecution of individuals for failure to file tax returns, provided they voluntarily file, or make arrangements to file, before being notified they are under criminal investigation. The taxpayer must make an honest effort to file a correct return and have income from legal sources. A letter from the IRS concerning taxes is not a notice that a taxpayer is under criminal investigation.

The IRS helps to get people back into the system as part of its long-term plan to improve voluntary tax compliance. The IRS wants to get people back into the system, not prosecute ordinary people who made a mistake. However, flagrant cases involving criminal violations of tax laws will continue to be investigated.

[Modem Butterfly]

15. Thanks! I've sent her the link from your post

Some people are simply not safe to be out by themselves.

[Bunny]

10. Does she make enough to owe taxes?

If she's very low paid, she may not be required to even file. But that would be extraordinary, I think. I'm guessing she's in for a very rude awakening.

[Modem Butterfly]

11. I'm sure she does

She says she's never filed, and I think she's about 30 or so, so maybe she's always been owed a refund that she never got?

[Philostopher]

19. That seems likely.

I'd imagine if she'd owed money, they'd have found her through her SSN at work. Likely enough, she wasn't underpaying -- so they saw no point in reminding her to file. I would think if she owed, they'd remind her! I don't know, but that's my suspicion.