08 Feb Do People Lie to the IRS?
I happened to Google this question, and not surprisingly, there was an article written on the subject. Although the article was from 2016 (the link is provided below), I seriously doubt the numbers are any better. There are many great statistics noted, but the bottom line is that roughly 1 in 4 are ok with withholding information about extra income from the IRS despite the possibility of jail time.
Very honestly, I am not surprised by the survey results cited in this article by Don Jergler that appeared on insurancejournal.com on March 15, 2016.
So you may be thinking, “what does this have to do with E&O?” Actually, a lot. If someone is willing to lie to the IRS, I would guess they would be more willing to lie to their insurance agent.
Customers lying is an issue that agents have been dealing with for many years.
However, now that there are some facts to support it, what will you do about it as an insurance agent? In several blog posts since January 2020, I referenced the need for agents to require customers to review the application before they sign it. The power of this approach is that customers will be held responsible for the contents of an application they have signed. In a problem down the road, taking this approach can provide a valuable defense for the agency. Obviously, it is virtually impossible to hold a client responsible for the contents of an application if that application was blank when they signed it. This also gets to the heart of why an agency should never sign an insured’s name to an application.