Christian Advice on Paying Your Taxes
Have you ever noticed when you put the words “the IRS” together, it spells “theirs?” Most of us feel like all we ever do is pay taxes. And the truth is, taxes are the only certainty in life (aside from death). No less a genius than Albert Einstein is quoted as admitting, "The hardest thing to understand in the world is the income tax." While it may be hard to understand, the same moral and ethical guidelines that we follow in life apply to paying our taxes.
Jesus was once asked about paying taxes. In Matthew 22:16-22, Jesus is confronted by the Pharisees regarding the necessity of paying taxes. Of course, they weren’t really interested in knowing whether or not they needed to pay taxes. They were more interested in trapping Jesus. But, as usual, Jesus not only puts the Pharisees in their place but gives us some wisdom to live by.
16…”You are impartial and don't play favorites. 17 Now tell us what you think about this: Is it right to pay taxes to Caesar or not?” 18 But Jesus knew their evil motives. “You hypocrites!” he said. “Why are you trying to trap me? 19 Here, show me the Roman coin used for the tax." When they handed him a Roman coin, 20 he asked, "Whose picture and title are stamped on it?"21"Caesar's," they replied.
"Well, then," he said, "give to Caesar what belongs to Caesar; and give to God what belongs to God." 22 His reply amazed them, and they went away (NLT).
Jesus acknowledged that the government makes lawful requests of us. We are responsible to God in all things, but we must be obedient to the powers that be in things civil and national.
In Romans13:1-7, Paul confirms what Jesus was talking about:
Everyone must submit to governing authorities. For all authority comes from God, and those in positions of authority have been placed there by God. 2 So anyone who rebels against authority is rebelling against what God has instituted, and they will be punished. 3 For the authorities do not strike fear in people who are doing right but in those who are doing wrong. Would you like to live without fear of the authorities? Do what is right, and they will honor you. 4 The authorities are God’s servants, sent for your good. But if you are doing wrong, of course, you should be afraid, for they have the power to punish you. They are God’s servants, sent for the very purpose of punishing those who do what is wrong. 5 So you must submit to them, not only to avoid punishment but also to keep a clear conscience.
6 Pay your taxes, too, for these same reasons. For government workers need to be paid. They are serving God in what they do. 7 Give to everyone what you owe them: Pay your taxes and government fees to those who collect them, and give respect and honor to those who are in authority (NLT).
Jesus and Paul make it clear that we are to pay taxes because we are to respect the governing authorities. As Christians, we also have a higher calling than the law to be ethical and completely honest about everything. I have spoken to many people who tell me that it’s OK to cheat “a little” because the government gets enough already. But Jesus told us in Luke, chapter 16, verse 10: "He who is faithful in what is least is faithful also in much, and he who is unjust in what is least is unjust also in much."
The basic distinction to be made is between "tax avoidance" and "tax evasion.” It's OK to minimize taxes by taking advantage of legal provisions of the tax law or even taking a sensible position on a vague question of law. But we cross the line into tax evasion, which is a criminal activity when there's no sincere claim of truth.
A good way for the average person to distinguish between a prudent plan to save money and an illegal and immoral scam is to ask a reputable tax adviser. If this professional openly advises that you don’t have to declare sheltered income, he or she probably believes your acts are solidly defensible. But an evasive answer such as "nothing will happen to you if you don't report" is a sign of danger.
Another guide is the degree of secrecy called for. Watch out when ordinary, prudent discretion crosses the line into "cloak and dagger" activities like wiring small amounts repeatedly, moving cash, or using way stations in moving money.
Of course, an accountant, like a lawyer or a judge, may interpret the law in a completely new light -- if the interpretation is professional and defensible. One thing we know about the law is that it is not always easy to interpret (hence Einstein’s belief quote above). But it is unethical to make an audacious claim based on the hope that the tax authorities won't notice.
Personally, I take full advantage of all of the tax deductions the government allows me. I take deductions for my charitable donations, business expenses, gas mileage, and anything else that is provided for in the tax law. I have come across quite a few people, Christians included, that cheat on their taxes.
And, in every case, I have been able to show them that by keeping good records and playing the game ethically, they can actually pay less taxes and honor God. And a funny thing happens when you honor God: He blesses you.
