Do those living in the United States, including Massachusetts residents, have to pay federal income taxes if owed? Do they even have to file federal income tax returns at all? Some people would say that the answer to these questions is no. They believe submitting those forms each year and paying taxes is voluntary, but — and no surprise here — the IRS does not agree.
According to the IRS, the term “voluntary” simply means that taxpayers have the opportunity to figure out their tax obligations themselves. Otherwise, the agency would do the assessment and tell taxpayers what they owe. Unfortunately, some individuals continue to believe that they do not have to file a tax return if they do not want to, and they could face expensive and serious penalties as a result.
As long as an individual makes over a certain amount, he or she may be obligated to file a tax return. There are limited exceptions, but for the most part, filing is required. If a person’s income tax calculations indicate a payment is needed, it must be submitted along with the return in order to avoid the assessment of interest and penalties. In some cases, failing to pay taxes could result in criminal penalties as well if evidence documents that an individual purposely evaded the payment of taxes allegedly owed.
The federal government has given the IRS a substantial amount of power when it comes to collecting unpaid taxes. If a Massachusetts resident hears that the payment of taxes is voluntary, he or she may want to gain an understanding of the law regarding this issue before making a mistake that could prove costly. Sitting down with a tax law attorney could clear up any confusion on this and other taxation issues that may arise.