[TheMercenary]

Originally Posted by TGRR

Anecdotes aren't evidence.

You have any presentable evidence to demonstrate that small contractors cheat on their taxes at the same rate that the "2%" do?

60%:

http://archive.gao.gov/d26t7/139722.pdf

the GAO cited an IRS estimate that the annual tax gap caused by self-employed individuals (including independent contractors) who did not report all of their income was $20.3 billion.

http://www.treas.gov/tigta/auditrepo...0130132es.html

2. State income tax revenue: According to published data, workers classified as independent contractors are known to underreport their personal income; as a result Illinois suffers a loss of income tax revenue when employees are misclassified. According to the IRS reports, wage earners report 99% of their wages whereas non-wage earners (such as independent contractors) report approximately only 68% of their income. This represents a gap of 31%. Other reliable studies estimate this gap to be as high as 50%.

Based upon IRS estimates that 30% of the income of misclassified workers is not reported, we estimate that an average of $125 million of income tax was lost annually in Illinois for 2001 through 2005. In just 2005, we estimate that $149 million of income tax was not collected in Illinois.
Based upon the higher estimate that up to 50% of the income of misclassified workers is not reported, an average of $208 million of state income tax was lost annually in Illinois from 2001 through 2005. For just 2005, we estimate this loss to have been $248 million.

I wonder how much I could save if I didn't report 30-50% of my income?