Taken From:http://www.al-islam.org/greater_sins_complete/
A tradition from the Holy Prophet (S) declares,
“Beware I inform you regarding the greatest of the mortal sins: Associating anything with Allah, disobeying parents and lying!” (Wasa’il ul-Shia)
A similar tradition has been quoted from Imam Hasan al-Askari (a.s.) also,
“All the evils have been locked in a room and its key is lying.”(Mustadrak ul-Wasa’il)
Angels curse the liars
The Prophet of Islam in another tradition is quoted to have said,
“When a believer utters a lie without a valid excuse, he is cursed by seventy thousand angels. Such a stench emanates from his heart that it reaches the sky and because of this single lie Allah writes for him a sin equivalent to that of committing seventy fornications. Such fornications that the least of which is fornication with ones mother.”(Mustadrak ul-Wasa’il)
Qur’anic verses denounce lying
Allah the Almighty says in Surah an-Nahl, verse 105:
“Only they forge the lie who do not believe in Allah’s communications, and these are the liars.”
And in Surah az-Zumar it is mentioned:
“Surely Allah does not guide him aright who is a liar, ungrateful.” (Surah az-Zumar 39:3)
“… and pray for the curse of Allah on the liars.”(Surah Āli- Imrān 3:61)
And also:“… the curse of Allah be on him if he is one of the liars.”(Surah an-Nūr 24:8)
“Only they forge the lie who do not believe in the signs of Allah.”(Surah an-Nahl 16:l05)
For it is clear that one who disbelieves in the divine communications cannot be a Mu’min (believer).
“…surely Allah does not guide him aright who is a liar, ungrateful.”(Surah az-Zumar 39:3)
“…Surely Allah does not guide him who is extravagant, a liar.”(Surah Ghāfir, 40:34)
Total abstinence from lying
Hazrat Imam Zayn ul-’Abidīn (a.s.) says,
“Avoid falsehood, whether it is small or big, in solemnity or jest.”(al-Kāfi)
Hazrat Amir ul-Mu’minīn (a.s.) said,“No man can taste faith, till the time he completely forgoes lying, in solemnity and in jest.”(al-Kāfi)
It is also related from Amir ul-Mu’minīn (a.s.) that he said:
“There is no merit in falsehood, whether in seriousness or in jest. Do not even promise your child something if you do not intend to fulfill it. Certainly, falsehood leads man to sin (fearlessly) and (this) leads to the Fire.”(Wasa’il ul-Shia)
Circumstances when lying is permitted
Whenever there is a danger to life, honour and property and if the danger can be avoided by lying, one is allowed to lie. The danger could be to ones own life, honour and property or to that of someone else. So much so that it is also permitted to take a false oath in this situation and in some cases it even becomes Wajib (obligatory) to speak a lie. E.g. when there is risk to ones life. In this case, it is Wajib to save oneself by lying and taking a false oath. For example, if an oppressor intends to kill a Muslim or to beat him up, dishonour him, seize his property or imprison him and if he enquires from you of his whereabouts, it is obligatory not to tell the truth even if one has to take a false oath and say that one does not know of his whereabouts.
In the same way if someone entrusts a thing in your possession and another intends to seize it; it is your duty to protect the entrusted thing even if you have to resort to falsehood or take a false oath
Quran Tafsir Class Blog 
What I thought most interesting about lying from last class is that a punishment for lying is forgetfulness. I never used to associate that with lying, but it makes sense to me now. If you lie a lot you are slowly removed from the right path and you also forget the things you are grateful for because you are too caught up in all of your lies.
What I thought most interesting about lying from last class is that a punishment for lying is forgetfulness. I never used to associate that with lying, but it makes sense to me now. If you lie a lot you are slowly removed from the right path and you also forget the things you are grateful for because you are too caught up in all of your lies.