Some Iowans have already been working on their income-tax reporting for the past year. Internal Revenue Service spokesman Christopher Miller says some, however, may be too enthusiastic about claiming refunds or exemptions. "Every year we see taxpayers attempting to use frivolous tax arguments," Miller says. "They claim the sixteenth Amendment was never ratified, that wages are not income, or that paying taxes of voluntary. Well, the courts have repeatedly struck down those arguments."
Some just need to check their grasp of the exemptions that may be available, and use them properly. Early filings show some taxpayers have requested a special telephone excise-tax refund, which is a real tax but they’re asking for far too much. He explains generally people can apply for an amount from thirty to 60-dollars for this refund, using a form 1040-E-Z-T.
In some cases, taxpayers appear to be requesting a refund of the entire amount of their phone bills, instead of the three-percent tax on long-distance and bundled service to which they’re entitled. He says if an accountant or friend has a great idea about a tax shelter, it may be too good to be true.
Be wary of advisors who recommend you shift under-valued property, usually stock, into Roth IRAs. This is an attempt to circumvent the usual contribution limit for IRAs and allows usually taxed income to go un-taxed. It’s also not permitted, and will mean trouble in the long run. And while it’s easy to check the IRS website for information, Miller advises you be wary if someone contacts you, claiming to be from the tax agency — as they’ll never ask for your vital financial information in an unsolicited phone call or e-mail.