Interesting Things You Did Not Know about Taxes
- August 28, 2020
- Posted by: email@example.com
- Category: Blog, IRS, Taxes
There is no denying that paying taxes is on all of our minds, barely in a positive way! The truth is that tax law is complicated to a considerable degree, and that makes for some very amusing, and at times odd tax trivia.
Keep reading to learn about some of the most interesting and fascinating things you most likely did not know regarding taxes.
Greater than 20 Percent of Paper Tax Returns have Errors.
The Internal Revenue Service has reported that while the error percentage for tax returns that are filed electronically is less than 1 percent, paper filers are a staggering 20 times more likely to drop the ball make some error. These errors can result in tax returns, getting rejected, or audited. Therefore, it is in your best interest to file your tax returns electronically and lower the risk element. You can file your tax return electronically completely free of cost if you do not earn more than 64000 dollars per annum.
IRS Never Requests You for Electronic Personal Information
It is of paramount importance that you know of various scammers who may text, call or email you claiming to be a representative of the Internal Revenue Service. You can protect yourself from identity theft (tax-related) and scams with some awareness. Most people do not know that the IRS will never reach out to you and ask for immediate tax payment that you owe, nor will they call you up without emailing you first.
Furthermore, you can always appeal or question the tax amount they claim that you owe. If you receive a dubious call from someone and think you may owe taxes, be sure to call the IRS immediately. If you are certain that you do not owe any taxes, report the incident promptly to TIGTA (Treasury Inspector General for Tax Administration).
The Tax Code is Extremely Long
An interesting thing that most folks are not aware of is that the tax code is extremely long (to give you a rough idea- it is more than a staggering 74000 pages!).
There is a firm reason why so many individuals pay qualified professionals to prepare and organize their taxes. Since the tax code itself is very long, it is sure to take even a blazing fast reader over 1,100 hours to read through all of it!. However, the tax code was not always this extensive and detailed. Several decades back (in 1913 to be precise), the tax code was just 400 pages long. How is that for a stark contrast?
The fact that its rules are updated constantly is a significant reason why the tax code is very detailed. As an example, there have been more than 4,500 modifications and alterations made to the tax code in the last 15 years. Some of these modifications work in favor of taxpayers, like when new credits are initiated and introduced.
Employees of the IRS also Break the Law.
This one will probably take most of you by surprise- even the IRS employees ( who we put on a high pedestal) tend to break the law! When we normally think about evasion of tax, we have a habit of picturing wealthy celebrities and superstars hiding their money! However, a couple of years ago, it was officially revealed that roughly about 1,600 workers from the IRS evaded their owed taxes willfully over a decade. What’s even more of a surprise is that most people were not given the pink slip! And although 1600 is a modest percentage of the agency’s employees, it barely does any good to the official image of the IRS!
Tax Payers who do not File Returns Lose out on Millions of Dollars!
The majority of the individuals who do not owe any taxes ignore filing their returns as they fail to realize that there are, in fact, several tax credits that provide refunds. As a case to point, the Earned Income Tax Credit provides more than a lucrative 6000 dollars refund for those who do not owe any taxes. However, it is quite surprising that about 20 percent of eligible tax filers neglect to take advantage of it! Also, what most of the folks also do not realize is that one has up to 3 years past post the deadline of filing to ask for a refund from a tax return that is not filed, so it pays to act if you think that the Internal Revenue Service owes you money from an earlier tax year.
4 years back, in April 2016, taxpayers gave up a staggering 950 million dollars in refunds from the tax year of 2012. Think about it- that is a considerable amount of money to give up!
Less than a Minuscule 1 Percent of Official Tax Returns are Audited
Although most taxpayers in the United States of America live in dread of an audit, you will find it fascinating to know that a bulk of the returns are never really questioned (less than 1 percent of returns are audited!). Furthermore, those that do get audited, around 70 percent, are done through the mail. What that means is that most individuals never have to face the much dreaded IRS inspections (in-person) you usually see on Television. Although those in the high earning bracket have a greater chance of being audited than low-income tax filers, there is also an increased risk for those who do not report any income.
Other Interesting Facts You Probably do not know about Taxes.
Some of the other interesting details regarding taxes you may be interested to know include:
- It can benefit a whistleblower in the United States of America. Any individual who reports their organization for tax evasion to the Internal Revenue Service receives an impressive 30 percent of the total amount that the agency collects.
- If you are a citizen of the United States of America, you have to pay and file your taxes even if you reside in some other nation. There is no escaping taxes!
- While cryptocurrency has the “currency” word in its name, the Internal Revenue Service does not officially consider it a valid currency. Instead, they have classified it as an estate property and tax it like stocks, even when you use it to buy something.
- There is a certain kind of tax nicknamed “sin tax.” Such taxes are usually on alcohol, gambling, and tobacco.
Wrapping it Up
Knowing some of the details above about your tax system might not make you feel any good or perk you up, but it might help you plan a few things if you are embarking on your yearly tax odyssey!