There are various times when making incorrect assumptions can wreak considerable havoc on a person’s life. One of these times is tax filing time. Making incorrect assumptions when it comes to one’s taxes could result in a person making critical mistakes in their tax filings. Such mistakes could put a taxpayer under significant IRS scrutiny, and subject them to the many impactful things that can go along with such scrutiny.
Among the things that can lead to a person making false assumptions in relation to their taxes are tax myths. There are a wide range of tax myths out there. A recent article on Fox Business’ website went over some of the myths that could cause particularly big problems for taxpayers, such as the myth that cash income doesn’t have to be reported.
A good protection against falling into the trap of tax myths is understanding the truth of the issues they involve. So, staying properly informed on the tax issues that relate to their situation can be important for taxpayers.
What is the actual status of cash income when it comes to taxes? Cash earnings are supposed to be reported. A person could end up getting in significant trouble with the Internal Revenue Service if the agency finds signs that they failed to report cash income they received.
Having the right information can also be critical when one does end up facing scrutiny from the IRS in relation to their taxes. Making incorrect assumptions regarding how best to respond to the situation could make an already difficult situation worse or cause a person to miss out on opportunities to resolve the situation in a way that fits with their overall interests. Among the things a taxpayer can do to try clear understanding of their situation and the issues it raises when they have been accused of tax missteps by the IRS is discuss their situation with an experienced tax lawyer.