Theme 1: Your Role as a TaxpayerLesson 3: The Taxpayer's Responsibilities
The U.S. income tax system is based on the idea of voluntary compliance; it is the taxpayer's responsibility to report all income. Tax evasion is illegal. Some people try to evade paying taxes by failing to report all or some of their income.
Money-making activities that aren't reported to the government are part of an underground economy. If taxpayers fail to pay what officials say they owe, the IRS can collect back taxes and assess a penalty.
Tax avoidance is perfectly legal. The IRS allows taxpayers to claim certain deductions, credits, and adjustments to income. For instance, some homeowners can claim a deduction for interest they pay on a home mortgage. Many people pay more federal income tax than necessary because they misunderstand tax laws and fail to keep good records.
Activity 1: Tax Avoidance and Tax Evasion Discover what's legal and what's not.
Activity 2: Voluntary Compliance Match taxpayer comments to the IRS response.
Activity 3: Match & Memory Game Test your tax IQ.
Complete the assessment page to test your understanding of The Taxpayer's Responsibilities.
Do you want to have a say in our country's tax laws? Go to Theme 1, Lesson 2 to learn how you can participate in the informal tax legislation process.
What can happen to a taxpayer who does not follow the system of voluntary compliance?
Did You Know?
The IRS received more than 146 million individual income tax returns in the filing season. Test your tax trivia knowledge by answering the following multiple-choice question. To assess your answer, click the Check My Answers button at the bottom of the page
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