Homeowner exposes tax-evasion scheme of an illegal property flip for community integrity

Tax evasion is a harmful practice that many individuals indulge in. They go to great lengths to conceal their income, inflate deductions and utilize illegal methods to reduce their tax liability. What this does is shift the burden onto honest taxpayers and weaken critical public services like education, healthcare and infrastructure. Reddit user u/Succesful-Heart9134 shared a satisfying story of exposing a tax-evading individual. The post titled, "Call me a Snitch But It Felt Good," has received 4K upvotes on the platform with 421 comments.

They talk about how they were browsing Zillow, a real estate marketplace website and noticed something strange. They write, "I noticed a home that was sold in May 2023 and listed for sale in July 2023." Wanting to investigate further, they looked at the owner's history of the property. Upon doing so, they found out that the property was an LLC (Limited Liability Company) flipped in May as a house. What was even more surprising was that the property showed up as a Principal Residence Exemption.

It essentially meant that owners of the property would have reduced capital gains taxes. They further state the property was not occupied by the owner in the listing on the website. Not willing to let them get away with it, the individual contacted their treasury office and informed them about the house, as they took property taxes very seriously. Being in a school district, they were an honest taxpayer and it dismayed them to see such illegal practices. The Reddit user gave the office proof in the form of screenshots. They concluded by writing, "It felt good snitching on this flipper, especially since they are lying and stealing from my community."

People on the platform supported the user's decision to report them and voiced their opinions in the comments. u/Mustangfast85 said, "I'm honestly surprised counties and cities don't go through sales data and find these types of anomalies and then hit them with the bill plus interest and penalties. You could probably hire a new person just to do that, check if they have a driver's license to that address, check Airbnb listings, everything. I would prefer everyone pay less taxes, but everyone should pay what is owed."

Another user, u/officerfett, said, "I started reporting LLCs that had arrangements with apartment complexes for corporate housing, but because of remote work, they were double dipping by posting listings on Airbnb without the approval of the complex or their parent companies. Town and county government are being notified, followed by local news, with HUD and the IRS soon to follow."

According to a study done by FinMasters, it was found that 85% of Americans pay their taxes on time. The same study also revealed a tax gap of $496 billion, with the net tax gap being $428 billion. Underreporting was found to be the most common type of tax evasion, which accounted for an alarming 80.24% of the gross tax gap. The American government loses approximately $496 billion to individual tax evasion every year. So it's high time that such practices be thoroughly investigated and shut down as they end up affecting honest people who pay their taxes on time.