You might’ve heard, due to budget constraints, that the IRS doesn’t audit as many people as it used to. But that doesn’t mean you should get any ideas.
“I think honesty is absolutely the best policy. You’ll sleep at night,” says tax accountant Janice Hayman.
Besides, she says, you should assume the IRS already knows everything.
“So much of our information now is documented. It’s being reported by others to the IRS,” Hayman notes. Which means you need to report it too or risk raising a red flag.
That said, don’t lose sleep because you’re worried about making a small mistake.
“The IRS can certainly tell when something is just an oversight. Normally it’s not a large sum of money,” Hayman says.
But, she says, “For an average taxpayer, forgetting to pay a large sum of money looks suspiciously like fraud, so you want to avoid that at all costs.”
If you make an honest mistake, that’s not fraud — it can be amended.
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