This situation is definitely common. Because of all the tax loopholes, the rich get away with not paying taxes. The poor end up paying more to the IRS than they do, as an outcome. Click here to read or watch more IRS Help resources.
At times this is real. Tax professionals can determine tax loopholes to keep their clients’ money out of the IRS’s hands, and most people who make over $100,000 yearly can avail of their counsel. There have definitely been some abuses over the years. The IRS has since initiated a crack down on people abusing the tax code loopholes. There is a difference between acting illegally and acting on a tax loophole if you want to give less to the government by lowering tax liability. You’ll also end up in jail if you act illegally. For the IRS to stay away, there are various steps you should avoid and some things you can do to safeguard yourself.
Nearly 60% of all taxes are paid by people who make over $100,000 yearly. The people within this range have a higher likelihood of being audited because the IRS focuses their attention on them. In case there is an IRS issue or audit, always save vital records to use as a reference and keep your exposure to a minimum.
How they’re cheating the IRS out of taxes via offshore accounts are what most people like to show off about. These people normally get caught. This is because the IRS has a fraud hotline where anyone who turns in such offenders are rewarded up to 10% of the amount settled. Such offenders can get their dues if you keep your ears alert.
You have likely heard of ‘secret’ ways and strategies to avoid paying taxes to the IRS. The tax code is available to anyone who wants to examine it. Are there really many secrets out there? These ‘secret’ methods sold to people have been rejected by the IRS and in court. Not only will you face rejection, you can be penalized up to $25,000 for blatantly wasting the government’s time with a frivolous tax return.
A loophole that business owners often abuse is the deduction of business expenses. They often try to deduct personal expenses as business expenses, prompting the IRS to audit them. It is best to distinguish between business and personal expenses if you don’t want IRS problems on your hands.