For instance, using the peel-off Internal Revenue Service mailing label will not increase a return's chances of being audited, the association notes. Another myth is that filers are not required to report any tax-exempt interest to the IRS, when, in fact, taxpayers are required to report the income because it is one of the factors that determines the amount of Social Security benefits included in gross income.
Some taxpayers also think that educational expenses are always deductible on tax returns.
Hopefully, their CPA or preparer will remember that in order to be eligible for such a deduction, the education must be required by the client's employer, by law or by government regulation. Preparers should also remember that non-IRA mutual fund switching must be reported even if it involves switching to another fund within the same company's family of funds.