 |
|
|
|
|
|
|
|
|
|
|
|
|
|
 |
|
||||||||||||
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
||||
 |
 |
 |
|
||||||||||
 |
 |
 |
|
||||||||||
 |
 |
 |
 |
 |
|
||||||||
 |
|
||||||||||||
Tax myths
Don’t let rumors and bad information lead you astray
by Ward Lowe The complexities of the federal tax code breed plenty of myths about the operations of the IRS. You may have heard tales about how to file an "audit-proof" return or how to challenge the legality of the government’s tax system.
Most of these stories are myths, and some common ones are presented below:
Don’t file if you can’t afford to pay. Failing to file a tax return can result in costly penalties. Instead, contact the IRS–before the filing deadline–and inquire about installment payment plans.
"I’m more likely to get audited if …" Many myths exist about what causes you to get audited. Some claim that using the preprinted tax label increases your audit chances, when it actually just speeds the processing of your return. Others have long held the belief that your odds of an audit increase as your salary climbs. But in recent years, more audit resources have been dedicated to non-filers, and the audit rate has increased for lower-income groups.
Taxes are unconstitutional. Before you head to the courthouse to argue the legality of paying taxes or filing returns, read "The Truth About Frivolous Tax Arguments." The IRS in August 2001 published this 25-page legal summary, which can be found online at www.treas.gov/irs/ci/tax_fraud/frivolous.pdf, to debunk many complicated arguments against the American tax system and claims about the illegality of government taxation. The IRS also publishes information about popular, illegal tax schemes and anti-taxation programs at www.treas.gov/irs/ci/tax_fraud.
You must have receipts for all business-related deductions. The IRS now allows expenses $75 or less to be deducted without a receipt as long as you can provide records showing the cost and business purpose of the expense.
After you receive a tax refund, you won’t be audited. The IRS can audit your return for three years after it’s filed.
Photo © Corbis Images.
home current issue top 10 resources
Buyers & sellers,
visit www.texasrealestate.com.
REALTORS®, visit www.texasrealtors.com.
