Tax filing is a little bit like homework, in that it involves turning in information that meets certain requirements. To be sure, the IRS does not exactly give you a letter grade on what you turn in (or fail to turn in). But an audit, or even worse a criminal investigation, can carry consequences more […]

Let’s continue our discussion of how the sheer complexity of the tax code makes it difficult to stay in full compliance. As we noted in the first part of the post, it’s all too easy to make an innocent error or to be unaware of some specific requirement. This is where the concept of “willfulness” […]

A few weeks ago the world was introduced to one of the largest information leaks ever seen: over 11.5 million documents and 2.6 terabytes of information from the Panamanian law firm Mossack Fonseca went public. While the leak does not necessarily stamp all those involved with guilty convictions for tax evasion, money laundering, or any […]

Tax avoidance is a perfectly honorable American tradition. You have every right as a taxpayer to take advantage of deductions, credits and other preferences to minimize or avoid taxes – as long as you stay within the law. But staying within the letter of the law can be difficult when the tax code is so […]

Let’s continue our discussion of the disparity between the cumulative amount of tax that the IRS says taxpayers owe as a whole and the amount that the agency collects in practice. This difference or disparity is called the “tax gap.” In the first part of this two-part post, we noted that underreporting of income is […]

“Tax gap” is kind of a wonky term. But it reflects a tax compliance and enforcement context that has definite implications for taxpayers. The term refers to the difference between the amount of taxes that a revenue agency actually collects and the amount of taxes that theoretically were due. In this two-part post, we will […]

It’s no secret that the IRS doesn’t have quite a much capacity as it once did to conduct tax audits. We wrote about one aspect of that in our March 22 post on businesses taxes. But what are the odds of a tax audit? Here are three things to know, in the form of a […]

In the first part of this post, we began discussing a powerful hammer in the IRS’s enforcement toolkit for payroll taxes. This hammer is the trust fund recovery penalty (TFRP). Last week, we discussed what it is and how the IRS can use it to go after individuals who willfully fail to collect or pay […]

Uncle Sam is very serious about collecting income and employment taxes that are supposed to be withheld by businesses. To be sure, the IRS is serious about collecting other taxes too. But with employment taxes, the agency has an additional and potentially powerful tool: the trust fund recovery penalty (TFRP). In this two-part post, we […]

You owe taxes but you don’t have the money to pay them. What to do? At this point, three days before the filing deadline, you’ve got two immediate challenges for this year’s taxes. One is avoiding the failure-to-file penalty. The other is avoiding the failure-to-pay penalty. And you may also have tax debt from previous […]