Is it a lie to not report income in taxes?

score:5

Accepted answer

As a lay practitioner you should make the fivefold offering (pañca,balī) out of which offering to the king [the government] (rāja,balī) which is akin to tax filing in the modern day. [Adiya Sutta, Patta Kamma Sutta]

Since taxes are legally owned by the government and not paying them would be misappropriating something belonging to the government which is similar to stealing. If you add false information in your tax return to get away with taxes then it is both lying and stealing. Also withholding information with the intent to mislead is also like lying.

Having said this by all means use tax planning / tax avoidance (legal) but not tax evasion (illegal). If what you are doing is illegal and there are sums owed to the tax authorities then it is stealing as iterated above.

Upvote:-1

I know that the western buddhist monastics at Sravasti Abbey consider it a lie and stealing when not reporting income in taxes. But if it's a situation where you're lying to save someone's life, that's a different matter.

It sounds like you were in a tricky situation. What did you end up doing and how did you come to your decision on the matter?

Upvote:0

OP: Facing a situation where if I report cash income, a lot of people would get in trouble.

Why would this happen? Is it because the income came from illegal sources?

If so, then this is your main problem to solve.

OP: Would it be a lie to report income as zero when filing taxes?

Tax evasion can be considered lying and stealing.

However, legal avoidance of tax is perfectly ok. For e.g. maximize the use of tax deductions and if you're in business, make sure your profit is calculated after considering all possible costs. In some countries, rental income is only considered after deducting property taxes and maintenance expenses.

OP: Is abstaining from declaring income on paper a lie?

If it's tax evasion, then yes.

If it's legal tax avoidance, then no.

Upvote:2

I believe so. It's breaking 4th precept thru and thru. One of the anisong (good karma) of holding precepts is troubles dont come to you (or staying out of trouble). Being accurate on ur tax form would def help keep you from getting into trouble with IRS. I feel your pain. I waited tables when I was in school. For $30K cash earned, you could owe IRS as much as $7K. Holding 5 precepts is a quality of an Ariyan. $7+k is a more than a fair trade to become one. If this year is too late, perhaps planning for next year?

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