Spotting the Tax Cheat

He's a risk taker. And he's rich! PT profiles the typical Uncle Sam stiffer.

By Stephanie Albert, published March 1, 2006 - last reviewed on June 9, 2016

April 15th brings out the liar in many people: 17 percent of Americans fail to pay their allotted share of the income tax bill, according to the Internal Revenue Service, creating a shortfall in the neighborhood of $300 billion each year.

Tax evasion isn't just about greed. Some people lie to Uncle Sam for the thrill of it, or because they think they are too clever to be caught. Others cheat simply because they believe everyone else is doing it.

He Gets A Kick Out Of Risk

Tax evaders tend to be thrill-seekers, or type "T" personalities. They're likely to be energetic and impulsive.

He's Red And Blue

Tax cheats aren't liberal or conservative. Per capita, Nevada and Washington, D.C., have the largest number of tax evaders. Citizens of Vermont and South Dakota are the most honest.

He's In Business

Type T personalities gravitate toward investment banking and entrepreneurship.

He's Not Shy In The Driver's Seat

People who "flip the bird" in traffic are also likely to cheat on their taxes, according to one lifestyle survey. Both behaviors are ways for people who feel wronged to feel they're getting even, says Martin Horn, an executive at DDB Needham.

The Gender Gap

Overall, men are more likely to lie on their tax returns than women. In studies, women are less apt to cheat when reminded of the potential penalties of tax evasion. However, among women, those with college degrees cheat more often than those with less education.

Uncle Sam Has His Number

The IRS knows that the wealthy—those who earn over $100,000 per year—and the self-employed are most tempted to cheat. They are therefore most likely to get audited.

Nab Him!

Rat out a tax evader and the IRS will pay you up to 15 percent of the recovered taxes.