Most in Atlanta have been raised believing that there are only two inevitabilities in life: death and taxes. There are some, however, that might say that the latter is not necessarily inevitable. Advertisements from providers offering advice and services to help people reduce their tax liabilities often pepper popular media. Some might even claim to know the secrets to avoid having to pay taxes altogether. Many may wonder which (if any) of these services are legitimate.
Understanding which tax avoidance strategies is critical if one wants to avoid facing federal tax evasion charges (indeed, according to information shared by the Internal Revenue Service, 2,886 criminal tax evasion cases were initiated in 2018 alone). Minimizing one’s tax liability is viewed as being a component of a successful personal finance strategy. The trick understanding how to do so within the confines of the law.
The issue typically comes down to a matter of reporting. Tax avoidance is typically legal as long as one still provides all of their pertinent financial information on a return and said information is accurate. This offers proof that one’s claims of not having to pay a certain tax are credible. One should keep in mind, however, that such information must be able to be verified. In its Tax Crimes Handbook, the IRS lists the most common form of tax crime as individuals under-reporting income or falsely inflating their deductions.
In general, people should avoid tax avoidance practices that claim to be able to completely eliminate their tax burden. It is assumed that everyone will have to pay at least some income tax. Any claims that is not accurate should be thoroughly researched if one is contemplating employing a new tax strategy.