Top Tax Excuses: Filing a tax return is optional
This post was written as part of a series on tax excuses that don't work.
Not so fast. This lie is based upon an incorrect interpretation of what a "voluntary" tax system is, which is mentioned in some IRS instruction booklets. A voluntary system under the tax laws of the United States doesn't mean that paying taxes is voluntary.
It means that taxpayers "volunteer" their information to the IRS, including how much income they have and the resulting tax due. However, taxpayers are obligated to provide this information. The IRS gives us a chance to correctly report the numbers, and they may later go in and do clean-up via an audit or other inquiry.
But the use of the word "voluntary" doesn't mean you don't have to report your income to the IRS. You do.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.