Q&A: Assisting a Transgression of Tax Evasion by Paying in Cash
Assisting a Transgression of Tax Evasion by Paying in Cash
Question
Hello Rabbi,
If Anonymous's landlord asks him to pay the rent only in cash, claiming that this way he will not have to report the rental income to the tax authorities, is there, from Anonymous's standpoint, a prohibition of assisting a transgression? In addition, is there an obligation to report to the tax authorities someone who evades taxes? Or perhaps one should first inform the tax evader that you intend to report him, in order to allow him to report himself?
Best regards,
Answer
It seems to me that this is also forbidden by civil law (but one should ask a lawyer). In principle, there is here a prohibition of assisting, and even the Torah-level prohibition of “do not place a stumbling block,” because without you he cannot do it (“two sides of the river”). In principle there is an obligation to report, but it is appropriate to warn him first. However, all this requires consideration, because common practice is to underreport a little. And although that is a bad practice, it still seems to me that one should not ignore it.
Discussion on Answer
About exactly that I said it is hard to permit, but also hard to forbid across the board. Like driving above the speed limit. The practice of the average citizen is to go a bit over the speed limit and to conceal a bit of tax.
I am asking more specifically about the obligation to report—whether there is room to be lenient. Because the landlord might react unpredictably if the tax authorities suddenly contact him.
I didn’t understand the question.
Beyond the prohibition of assisting through cash payment, is there an obligation to report a landlord who evades taxes to the tax authorities, or since many people customarily evade taxes can one be lenient regarding the duty to report?
Do you mean landlord and tenant? As far as I know, apartment rental is not taxable.
In general, if many people customarily evade, there is room to be lenient about reporting. It is hard to justify this, but that is my sense. In general, the law of the kingdom is law in a democratic state means that one must behave like a reasonable citizen, and not necessarily obey every law. Even the Attorney General allows himself to determine that there are laws in which there is no public interest to enforce, and the like. I again refer you to the example of driving above the permitted speed.
Someone who rents out his only residential apartment and rents another in its place is exempt from tax.
Someone who owns two apartments profits from rental, and therefore is liable for tax on the income from the second one.
I don’t think you are right.
What I know is that someone who earns more than 5,000 NIS from rent has to pay tax on it.
Indeed. That’s what I know too.
And why in all these questions is there not even one side considering informing on one’s fellow in secret?
??
With God’s help, 12 Tishrei 5778.
Oren—greetings,
Without entering into the halakhic aspects, which are for halakhic decisors to decide, I will note two practical points:
A.
Often, someone who asks for cash payment does so not in order to evade tax, but because he is short of money—for example, someone who has a large overdraft at his bank, and the like.
B.
Either way, whether the demand for cash payment stems from an attempt to avoid paying tax or from the landlord’s cash-flow difficulties—I would not recommend entering into this rental. Perhaps the apartment has defects the landlord is concealing? Perhaps he will not be able to fulfill his obligation to carry out repairs incumbent upon him?
A rental is a transaction, and like any transaction, it is worth paying more but being as sure as possible that the person facing us is upright and reliable, someone who both wants and is able to meet his commitments.
Best regards, S.Z. Levinger
“Michi: ??” I mean that regarding the question of whether it is permitted to evade tax, I understand the pilpulim: if it’s forbidden, then there is a problem of assisting for someone who participates in it. But what is this whole business of reporting?! On what side is being a goody-goody in the law of the kingdom? This is an ugly act that can get a person entangled permanently and ruin his life and his family’s life. Why is this not the transgression of informer? See chapter 4—it isn’t available to me right now. Why is it not “striking one’s fellow in secret”?! Why is it not even a possible angle in the whole thread above? Did I miss something?
See the Rabbi’s view in the comments on the post “State’s Witnesses”:
“It is foolish to think that one can live a normal life with the law of ‘informer’ applied to someone who turns to the authorities and cooperates with the law.”
https://mikyab.net/%D7%A2%D7%93%D7%99-%D7%9E%D7%93%D7%99%D7%A0%D7%94-%D7%9E%D7%91%D7%98-%D7%A2%D7%92%D7%95%D7%9D-%D7%A2%D7%9C-%D7%94%D7%94%D7%9C%D7%9B%D7%94-%D7%95%D7%A8%D7%91%D7%A0%D7%99-%D7%96%D7%9E%D7%A0%D7%A0/
And he repeated his words here on the site a number of times, that the law of informer applies when the accusation or the punishment are not moral and/or reasonable. When reason requires them, the “informing” is a repair of society.
Therefore, sometimes there is no “informer” in reporting to the secular courts, and sometimes there is “informer” in reporting to a Haredi religious court.
See:
https://mikyab.net/%D7%A9%D7%95%D7%AA/%D7%93%D7%99%D7%A0%D7%99-%D7%9E%D7%95%D7%A1%D7%A8-%D7%91%D7%99%D7%9E%D7%99%D7%A0%D7%95/
That’s being a goody-goody in the laws of a thief/robber. Someone who evades taxes uses the services of the state and does not pay for them, so not only has he violated the law of the kingdom is law, but also the laws of theft.
Following up on this question: recently I tried to look for a megillah written by a scribe for Purim. The scribe said he works off the books and therefore wants cash. Is there a problem of “do not place a stumbling block” or something else in paying cash in this way?
With God’s help, Festival of Redemption 5778
Oren—greetings,
Surely with regard to tefillin it is explained that “it is a law given to Moses at Sinai that their commandment is in black,” and since sacred scrolls are compared to one another, and a megillah is compared to a Torah scroll, it seems that its commandment is in black 🙂
But some are concerned regarding the megillah, for it says there, “And the king imposed a tax on the land…,” so it is fitting that the king’s scribes bear the burden of taxation. And who is greater for us than the president of our generation, Rabbi Donald Trump, may he live long, who also recognized the sovereignty of the State of Israel even in disputed Jerusalem; all the more so one should recognize the sovereignty of the state within the 1967 borders.
Best regards, Shterna Tzila Rot-Levinger, the “Women in the Tent” Institute for instruction in the laws of leprosy marks and tent-impurity
It seems so, within the limits I stated above (the local custom is to conceal a bit). I do not know where the line is drawn, but if there is no pressing need, it seems to me preferable not to cooperate.
What would the ruling be regarding a business owner such as a renovator or plumber who offers a discount for cash payment? Is there an obligation to report such a person? There are endlessly many of them. It seems to me this is something the Tax Authority is aware of and chooses to turn a blind eye to because of the allocation of enforcement resources.