According to the Washington Post, there are a lot of myths surrounding tax evasion. Tax issues are often complex, and most taxpayers lack a real understanding of the pertinent rules and regulations.
By gaining a better understanding, you can potentially sidestep issues and ensure you remain in compliance. Here are a few important points to keep in mind regarding tax evasion.
There is a difference between tax avoidance and evasion
While it is not usually in the best interest of taxpayers, tax avoidance is not actually illegal. For example, choosing to keep the property instead of selling it to avoid taxes on the sale is avoidance, and is legal as a result. On the other hand, taking deliberate actions to conceal taxable assets from the IRS counts as evasion and is illegal. A common example of evasion is moving assets to a bank in another country with the purpose of hiding assets from the IRS.
People at all income levels attempt to evade taxes
While there is a perception that only very wealthy people attempt to avoid taxes, the truth is that it can occur at every level of wealth. Attempts at paying less in taxes can occur even in small businesses if business owners partake in illegal processes. This can entail downgrading the actual level of income a business earns while playing up the costs for running that business.
Tax evasion and avoidance are not as common as you think
The majority of taxpayers are diligent about paying their fair share to the government. In fact, polls indicate that most people take an unfavorable view of cheating on taxes, despite the belief that the issue is widespread.
Tax issues can seem overwhelming at first glance, but very few are insurmountable. The key is to remain compliant with tax laws and keep in contact with the IRS should problems arise. In many cases, they are willing to work with taxpayers who approach problems with a good faith perspective.