What not to do

As we posted recently, if a "tax philosophy" sounds too good to be true, it probably is. Given the complexity of the tax law, people make mistakes. Lots of them. Including Presidential administration nominees. (Lots of them). But there's a difference between honest mistakes and flagrant disregard for the law. Tax practitioner Russ Fox recently discussed 3 sure-fire ways to get into trouble with the IRS, and to possibly go to jail. His post also includes the details of specific taxpayers who are in deep trouble because they did at least one of the following:

1. Pay employees in cash, and don't report it. Also, don't remit payroll tax to the government.
2. Skim some of the revenue off the top from a business, and don't report it on your tax returns.
3. Argue that there is no such thing as an income tax, or that it doesn't apply to you, or that it has never been ratified, or that it's unconstitutional.

The moral of the story: Although you can and should try to minimize your tax liability, you should not break the law, unless you don't mind the serious risk of losing all your assets and maybe even going to jail.