Tax Myths That Can Get You in Trouble with the IRS

You never want to tangle with the Internal Revenue Service; they’re relentless. Avoid these tax myths if you want to keep your nose clean.

Tax myths are right up there with urban legends for persistence in American popular culture, and they tend to have just as much truth to them — in other words, not much. Also like urban legends, they may seem scary but harmless…until the IRS comes out of the woodwork to take a bite out of you.

In this article, we’ll take a look at four common myths about paying federal income taxes, and tell what you really have to know to keep the auditors off your tail.

Myth 1: Paying Federal income tax is voluntary.

There are many people who honestly believe this tax myth to be true, and some of them can even offer convincing demonstrations that this is so. But they’re wrong. It’s only voluntary if you don’t mind paying big fines or going to jail.

Federal law explicitly lays out the taxation requirements for both private citizens and businesses, and it applies to all adults. In fact, the IRS takes tax evasion more seriously than some policing agencies do felonies. Remember, the only way they finally got Al Capone in jail was by nabbing him for tax evasion.

Myth 2: I’m not responsible for taxes owed by my spouse.

This tax myth has probably been responsible for more wailing and gnashing of teeth than any other. Here’s the reality: if you’ve filed separate income tax returns, you’re probably safe enough; but if you’ve filed a joint return with your spouse, the IRS will come after you. A signed joint return is an enforceable contract, and you’ll have to pay the taxes owned even if your spouse doesn’t.

If you have reason to believe that your spouse’s tax burden will be unreasonable and is likely to come back on you, you can try to convince your sweetie that you should sign separate returns. Good luck with that.

Myth 3: If I get divorced, I don’t have to pay taxes on a joint return.

What have you been smoking? Of course you do. See Tax Myth 2: your signature on a joint return is an enforceable contract. Nice try, but the IRS is a little harder to fool than that. The good news is, you don’t have to pay for that spouse’s tax-related excesses ever again once the divorce is final.

Myth 4: I’m a student, so I don’t have to pay taxes.

If you give answers like that on your tests, you’ll be a student for a lot longer than you’d like. The truth is, if you have any income at all, even from flipping burgers for beer money, Uncle Sam will want his cut.

The amount of money you’ll owe will depend on whether you’re claimed as a dependent by your parents, how many tax credits you’re eligible for, and how many burgers you’ve flipped. So study your situation, file the requisite forms yearly, and keep this tax myth tiger at bay while you’re trying to enjoy school.