upvoted for interesting ideas and personal experience on the topic. If I could strong-disagree, I would. I do not recommend this to anyone.
Mostly my reasoning is “not safe”. You’re correct that historically, the IRS doesn’t come at small non-payers very hard. You’re incorrect to extend that to “never” or to “that won’t change without warning due to technology, or legal/political environment”. You’re also correct that, at current interest rates, it’s about double at ten years. You’re incorrect, though, to think that’s the biggest risk. If they decide there’s a pattern that shows intent, penalties become MUCH higher. Unlikely to include jail time, but in terms of net expectation over all possible universes, it’s zero or somewhat negative for almost everybody. Admittedly, weighted toward “most get away with small amounts, a few have a VERY BAD experience”. But you could recreate that in Vegas with a simple 3- to 6- step martingale.
I also warn about lifestyle-distortion effects. Unless you reverse course and pay up (which is probably possible “just” by paying the back taxes and penalties, until some IRS investigator decides to start seriously documenting your intent), you can’t take a good W-2 job, can’t invest in real-estate, and need to keep a low enough profile that the IRS doesn’t decide to actually go after you.
I believe it’s not actually true that, if you merely repeatedly neglect to pay your taxes, the I.R.S. will inquire into your motives and intent in order to decide whether to come after you with both barrels blazing. As far as I can tell they do not have the resources or inclination to do that sort of investigation.
I base this largely on the experience of American war tax resisters. They are often loudly self-incriminating about their willful intent: sometimes going so far as to write letters to the I.R.S. explaining their motivation. Of the tens of thousands of Americans who have engaged in war tax resistance over the years, I know of only two in the past 80 years who have been criminally prosecuted merely for willful refusal to pay taxes (there have been others who have been criminally prosecuted or jailed for things like filing inaccurate forms or contempt of court, but those were cases in which they were defying the law in ways that went beyond merely not paying). The war tax resistance movement keeps pretty good records on its “martyrs” so if there were other cases like those two they would probably have come to my attention.
upvoted for interesting ideas and personal experience on the topic. If I could strong-disagree, I would. I do not recommend this to anyone.
Mostly my reasoning is “not safe”. You’re correct that historically, the IRS doesn’t come at small non-payers very hard. You’re incorrect to extend that to “never” or to “that won’t change without warning due to technology, or legal/political environment”. You’re also correct that, at current interest rates, it’s about double at ten years. You’re incorrect, though, to think that’s the biggest risk. If they decide there’s a pattern that shows intent, penalties become MUCH higher. Unlikely to include jail time, but in terms of net expectation over all possible universes, it’s zero or somewhat negative for almost everybody. Admittedly, weighted toward “most get away with small amounts, a few have a VERY BAD experience”. But you could recreate that in Vegas with a simple 3- to 6- step martingale.
I also warn about lifestyle-distortion effects. Unless you reverse course and pay up (which is probably possible “just” by paying the back taxes and penalties, until some IRS investigator decides to start seriously documenting your intent), you can’t take a good W-2 job, can’t invest in real-estate, and need to keep a low enough profile that the IRS doesn’t decide to actually go after you.
I believe it’s not actually true that, if you merely repeatedly neglect to pay your taxes, the I.R.S. will inquire into your motives and intent in order to decide whether to come after you with both barrels blazing. As far as I can tell they do not have the resources or inclination to do that sort of investigation.
I base this largely on the experience of American war tax resisters. They are often loudly self-incriminating about their willful intent: sometimes going so far as to write letters to the I.R.S. explaining their motivation. Of the tens of thousands of Americans who have engaged in war tax resistance over the years, I know of only two in the past 80 years who have been criminally prosecuted merely for willful refusal to pay taxes (there have been others who have been criminally prosecuted or jailed for things like filing inaccurate forms or contempt of court, but those were cases in which they were defying the law in ways that went beyond merely not paying). The war tax resistance movement keeps pretty good records on its “martyrs” so if there were other cases like those two they would probably have come to my attention.