Top 3 Tax Mistakes

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Explore:  IRS Tax Deductions

Insight from Inside the IRS

There are a lot of ways to get into hot water with state and federal revenue regulators.  But, in my experience, three mistakes are most common.

"I know I'm late filing, but I might as well wait until I have to money to pay."

This line of reasoning is very dangerous, especially if the failure involves more than one year. Even if you can't pay, filing a return is imperative.  A willful failure to file a tax return(s) is a criminal offense.  You could be prosecuted, and if convicted, fined and/or serve time.

“This isn’t a business expense, but I’m still claiming a deduction anyway” or “This is just a small percentage of my income, so I’m not going to report it.”

Tax laws are at times complex, so honest mistakes happen.  We can work with revenue officials to help fix those.  Honest mistakes are very different from a willful attempt to evade taxes or making false statements on a tax return.  Both are criminal offenses.

“I feel uneasy about my tax situation, but I’ll just wait to hear from an IRS agent or state revenue department official.”

Voluntary compliance is at the heart of our tax system and, therefore, it generally undercuts the element of “intent” necessary for a successful prosecution if it occurs before any contact by the IRS or by the State. You need to be proactive in a proper way.

Topics:  IRS, Tax Deductions

Published In: General Business Updates, Criminal Law Updates, Finance & Banking Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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