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Stiff penalties for tax cheats aren’t worth the risk

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No one enjoys paying income taxes, but there are at least two good reasons why real estate professionals should play fair with the Internal Revenue Service and state taxing authorities this tax season. The first and perhaps most compelling reason is that the stiff penalties for cheating aren't worth the real risk of being caught. A seven-year audit in Hawaii concluded that the state's top 10 real estate companies allegedly failed to pay more than $575,000 in taxes owed, interest on the unpaid taxes and penalties for tax fraud. The Hawaii Attorney General last year filed a lawsuit against 12 real estate agents who allegedly failed to report and pay taxes on $9 million of commission income. Failure to pay taxes in Hawaii can be punished with imprisonment for as long as one year and a fine of as much as $25,000. The state's tax department is also looking into civil cases against more than 45 other agents, according to an Inman News report. What's more, the IRS has a plan to improve c...