November 6, 2013

Did you ever see the 90s sitcom,“ Taxi?” The lead taxi driver was Alex, a middle- aged, average looking guy. Then there was Woody, a much younger driver whose character was a country boy, naïve and fresh-faced. In one episode Alex and Woody needed to win the trust of a man and woman they had not met. So they went to the couple’s apartment and knocked.

The door opened, just enough for the couple to see only Alex, as Woody waited to the side. Based on nothing but Alex’s looks, they immediately distrusted him and refused to listen to his plea. Just as they were about to shut the door in his face. Alex realized what he needed to do. He said, “Wait… look at him!” he said, stepping aside so they could see Woody. They took one look at Woody’s innocent face and said, “oh, okay, come on in.”

It was a great scene. One study indicates that – unlike Alex who knew he didn’t appear trustworthy — most of us think we have honest faces and can use them to get away with fudging the facts a little, like about income tax.

What Does Your Face Tell People about You?

The study mentioned above was done in Germany and called “Dubious Versus Trustworthy Faces – What Difference Does it Make for Tax Compliance?” The players had various tax scenarios, and were told that half of them would be selected for an audit. Some were told the selection would be random. Others were told the auditors would choose their audit targets by looking at photos of the players’ faces.

In the end, those who believed their photos would be used had a much higher tendency to fudge the truth, try to hide income and exaggerate expenses, etc. The researchers concluded, these people may have believed their “honest faces” would inspire trust in the auditors which would let the players get away with a bit of dishonesty.

Who knows if that’s really true or not? But Forbes magazine says while American taxpayers overall report 99% of their W-2 income (which of course, is information the IRS already has), they often report only about 45% of income that is not verifiable, like side jobs for cash. If we’re counting on our honest faces to get us through a dreaded audit, we need to rethink that.

Most audit targets are selected by computer and by the last year of an audit. And of those, most are cleared up by correspondence. That is a good thing, unless you were hoping you could bat your eyelashes and blink your baby blues at the auditor to squeak by. Rest assured, if you should have a face-to-face audit, an honest face might hurt more than help.

Hire a Professional Face

Tax professionals urge clients not to represent themselves, for many of the reasons stated above. People who think they appear honest might try bend the truth just a little, expecting to be taken at their word. In the end, they might accidentally volunteer too much information and open up a whole new can of worms.

When dealing with the IRS, no matter how honest and trustworthy you think you loo, don’t go without a pro.

Photo: Wikimedia