Tax Evasion Isn't a Game; It's Fraud

I know that there are lots of people who considering filing their tax returns to be a kind of game -- what can I get away with? Back at the dawn of time, when I was in business school, our tax professor said that the only advice he wanted us to remember was, "Be aggressive, not stupid."

Then he added, "If you have to ask yourself whether it's agressive or stupid, it's probably stupid."

Speaking of stupid....

UBS, one of the world's biggest banks, agreed yesterday to disclose to Justice and the IRS the names and account information of more than 4,000 Americans suspected of tax evasion, according to an article in the New York Times and elsewhere (for example, here from the Tribune de Geneve).

As reported by the Times' Lynnley Browning, the "landmark settlement peels back layers of Swiss banking secrecy, and is expected to provide a road map for the authorities as they try to crack down on tax evasion by Americans who, through private banks and other Swiss-based financial intermediaries, use offshore accounts that go undeclared to the IRS."

Back in February, Justice had sued for information on more than 50,000 American clients of UBS. The bank -- and a majority of Swiss citizens -- argued that such a broad sweep would violate Swiss banking secrecy laws (a number of Swiss are angry about the current agreement, saying that the US demands international respect of its laws, but doesn't respect those of other countries, and that, moreover, it is poor US regulation of the subprime market etc that is responsible for the current global recession. Yes, I know, that's another issue entirely.).

Also in February, UBS paid $780 million to settle charges that it had helped its American clients evade billions of dollars owed to the IRS, as well as the names of about 250 Americans suspected of tax evasion, with more to be released in the future.

I know that the IRS is the government agency Americans most love to hate. The late Leona Helmsley famously claimed that "only the little people pay taxes" (this, of course, shortly before she went to jail for tax fraud). And tax evasion is hardly just an American pastime.

But I just don't get it. I'm with Oliver Wendell Holmes on this (good company, no?): "Taxes are what we pay for a civilized society." If you've been so blessed by intelligence, hard work, luck, and social opportunity (the last of which is a government construct), that you have been financially successful, why wouldn't you want to pay your taxes?