Taxes are complicated, so it’s no wonder that everyone makes mistakes from time to time. But some actions go beyond incorrect arithmetic or thinking something is deductible when it’s not. Some actions can cost you tax breaks you might otherwise have been entitled to. And some actions can land you in serious trouble with the IRS, triggering steep civil penalties and, in some cases, criminal penalties. Here are actions to always avoid:
• Failing to report income. Intentional omissions of income can result in stiff penalties when discovered. And the IRS has more time than usual — six years instead of three years — to audit a return that omits more than 25 percent of gross income.
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