TAX: The Facts About Income Tax

TAX: The Facts About Income Tax

A wave of confusion and incertitude crops up every filing season and even beyond due to lack of clarity among taxpayers. Throughout the filing season, filers are thrown into a state of confusion. The exhaustive tax code that is constantly changing is often intelligible to many filers and these ignorant filers become culpable for a wrongdoing they do not even want to perpetrate. Imagine being arrested for ignorance! Due to their ignorance of the basic taxation information and fundamental procedures, they might awfully fail in fulfilling their tax duties. Filers don’t get the facts straight and end up becoming liable for imprisonment sentences.

Our tax code incorporates thousands of pages. Since the ratification of the Sixteenth Amendment, our tax code has grown a lot.  Thousands of taxation rules are subsumed under various sections in the tax code. This tax code has grown a hundred thousand times since 1913. From the development of modern income tax to the introduction of a broader definition of income, all tax statutes passed since 1913 invited a great deal of confusion among taxpayers. Income is no longer treated the way it used to be treated before the ratification of the Sixteenth Amendment. Since 1913, hundreds of congressional acts and statutory codifications have been passed. The tax law currently incorporates 10,000,000 words. The US income tax law comes from several sources. These include United States Constitution, Treasury regulations, Internal Revenue Code, Public Administrative Rulings, Private Administrative Rulings, Federal Court Opinions, Agency interpretative regulations written by Internal Revenue Service (IRS) and Department of the Treasury, Legislative History, and treaties written with other countries.

With so many things to understand, doing your tax return all by yourself can be very challenging. Taxpayers are confused about almost everything. From tax refunds to tax credits, nothing seems to be lucid to them. When you file an income tax return, every ounce of information has to be very correct and precise. The entire process of filing a tax return incorporates reporting one’s income and determining deductions and tax credits. But, this can puzzle an ignorant taxpayer who knows nothing about taxation.

Most of the taxpayers use fancy digital tools to get it done right yet they end up making mistakes. At times, a tax preparation software is not enough to help you through the entire process. Doing your tax return yourself even with the help of tax calculation software applications is still a challenge. At times, this invites more confusion. Nearly 85% of the taxpayers file their tax returns by the mid of April. People who can’t meet this April deadline are oblivious to many fundamental taxation details that are required to file the returns. These laggards usually include people with highly intricate business interests who need to be apprised of every tiny detail that is there.

Taxpayers also seem to be puzzling over their tax refunds. They are often thrown into confusion due to their lack of understanding of tax liability and tax refunds. When their tax liability is higher, they think they’ll have a small refund. Though, that’s not really the case. The tax code keeps growing and new policies are always being introduced in the tax code. Therefore, this lack of certainty among taxpayers is always growing too. The Internal Revenue Service (IRS) keeps releasing new taxation tables. The release of new withholding or retention taxation tables from Internal Revenue Service (IRS) engendered another wave of bewilderment among taxpayers. Online taxation calculators had to be revised in accordance with the new tables. All of this adds to the ordeal taxpayers are subjected to. A peculiar bedlam is engendered every time new policies are introduced regarding the filing of tax returns. 

Policymakers keep introducing policies without apprising the taxpayers of all the details associated with those policies. Since our tax code keeps expanding and new sections are always being added to it, it is incumbent on policymakers to apprise the taxpayers of all the information apropos of the new taxation rules. Policymakers are obligated to simplify and elucidate the enacted taxation laws. The communication between taxpayers and policymakers is at times so poor that it ends up subverting the best of intentions. Taxpayers need clarity and they are thrown into confusion with perplexing messages. Many things come up that end up making taxpayers more bewildered. For example, the possible deductions or credits that are related to dependents, educational expenses or child care.

Taxpayers spend hours calculating their tax returns online. They are not guided properly. The Internal Revenue Service (IRS) has the responsibility to provide proper guidelines to the taxpayers yet it is unable to do so as they don’t have enough personnel working at its toll-free lines. People who call the Internal Revenue Service (IRS) for help are mostly unable to get through. Though the official website of the IRS provides a comprehensive set of guidelines for the taxpayers, the increased traffic to the website creates problems.

Taxpayers should be apprised of every subtlety and nicety of tax law. Tax law keeps changing and it’s hard to know all the answers. People need help and they should be helped. Though the increased traffic to the IRS website is a problem, they have answers to all major questions regarding taxation on their website. The website has a handful of tools to help you get the required information. They have an interactive assistant and tax topics listed separately with an option to search any topic you want. They also have a section that answers all the questions asked frequently by the taxpayers. IRS requests people to look for the desired information online before making a call as call-waiting times are often prolonged. 

Taxpayers can also seek help from paid tax professionals. From certified public accountants to enrolled attorneys and agents, anyone with a preparer tax identification number can prepare a tax return. CPAs, enrolled agents, and attorneys have the power to represent their clients on any matter like appeals, audits, and payment and collection problems. There are other tax preparers that have limited practice rights. Internal Revenue Service (IRS) has a directory available online that helps you search for the best tax professionals in your area. 

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