Does the IRS give some help or leniency to first-time taxpayers?
As young people enter the work force, does the IRS give some help or leniency to first-time taxpayers? Or is it generally the parents' job to make sure that their children pay their taxes on time correctly the first time, and remind the young taxpayers to apply for tax refunds?
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No, there is no special leniency given to first time tax payers.
In general, this shouldn't be an issue. The IRS collects your taxes out of every one of your paychecks throughout the entire year in what is called a Withholding Tax. The amount that the IRS withholds is calculated on your W-4 Form that you file with your employer whenever you take a new job. The form helps you calculate the right number of allowances to claim (usually this is the number of personal exemptions, but depending upon if you work a second job, are married and your spouse works, or if you itemize, the number of allowances can be increased.
WITHHOLDING TAX
Withholding tax (also known as “payroll withholding”) is essentially income tax that is withheld from your wages and sent directly to the IRS by your employer. In other words, it’s like a credit against the income taxes that you must pay for the year. By subtracting this money from each paycheck that you receive, the IRS is basically withholding your anticipated tax payment as you earn it.
In general, most people overestimate their tax liability. This is bad for them, because they have essentially given the IRS an interest free loan (and weren't able to use the money to earn interest themselves.) I haven't heard of any program targeted at first time tax payers to tell them to file a return, but considering that most tax payers overpay they should or they are giving the government a free grant.
There's no such thing as "leniency" when enforcing the law. Not knowing the law, as you have probably heard, is not a valid legal defence. Tax law is a law like any other.
That said, some penalties and fines can be abated if the error was done in good faith and due to a reasonable cause. First time penalties can be abated in many cases assuming you're compliant otherwise (for example - first time late filing penalty can be abated if you're compliant in the last 5 years. Not many people know about that.).
Examples for a reasonable cause (from the IRS IRM 20.1.1):
IRM 20.1.1.3.3.4.3
Reliance on the advice of a tax advisor generally relates to the
reasonable cause exception in IRC 6664(c) for the accuracy-related
penalty under IRC 6662. See IRM 20.1.5, Return Related Penalties, and
IRM 20.1.1.3.3.4.1
If the taxpayer does not meet the criteria for penalty relief under
IRC 6404(f), the taxpayer may qualify for other penalty relief. For
instance, taxpayers who fail to meet all of the IRC 6404(f) criteria
may still qualify for relief under reasonable cause if the IRS
determines that the taxpayer exercised ordinary business care and
prudence in relying on the IRS’s written advice. IRM 20.1.1.3.2.2.5 -
Erroneous Advice or Reliance.
Treas. Reg. 1.6664–4(c).
There are more. IRM is the "Internal Revenue Manual" - the book of policies for the IRS agents.
Of course, you should seek a professional advice when you're non-compliant and want to ask for abatement and become compliant again. Talk to a CPA/EA licensed in your state.
It might not be leniency for first time payers, but they do have programs, some federal some local, that help the poor and elderly complete their tax forms. There are also programs that allow the poor to file electronically for free.
For most people the first time they file their taxes they are using the EZ form. Which is rather easy to do, even without the use of either web based or PC based software. The software tools all ask enough questions on the EZ forms to allow the user to know with confidence when their life choices have made it advantageous to use the more complex forms. The web versions of the software allow the taxpayer to start for free, thus reducing their initial investment for the software to zero.
Because the first time filer is frequently a teenager the parents are generally responsible for proving that initial guidance.
The biggest risk for a young taxpayer might be that the first year that itemizing deductions might be advantageous. They might never consider it, so they over pay. Or they discover in April that if they had only kept a receipt from a charity six months ago they could deduct the donation, so they are tempted to claim the donation without proof.
Regarding leniency and assistance there is an interesting tax credit. The Earned Income Tax Credit. it gives a Tax credit to the working poor. They alert people that they need to Check Your Eligibility for the Earned Income Tax Credit
They know that significant numbers of taxpayers fail to claim it.
EITC can be a boost for workers who earned ,270 or less in 2012.
Yet the IRS estimates that one out of five eligible taxpayers fails to
claim their EITC each year. The IRS wants everyone who is eligible for
the credit to get the credit that they’ve earned.
The rules for getting the credit are simple, all the information needed to claim it is already on the basic tax forms, but you have to know that you need a separate form to get the credit. But instead of making the credit automatic they say:
If you use IRS e-file to prepare and file your tax return, the
software will guide you and not let you forget this important step.
E-file does the work and figures your EITC for you!
and then :
With IRS Free File, you can claim EITC by using brand name tax
preparation software to prepare and e-file your tax return for free.
It's available exclusively at IRS.gov/freefile. Free help preparing
your return to claim your EITC is also available at one of thousands
of Volunteer Income Tax Assistance sites around the country. To find
the volunteer site nearest to you, use the VITA locator tool on
IRS.gov.
But if you don't use free file you might never know about the form. Apparently it escapes 20% of the people who could claim it.
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