For 86 years now, the income tax has both served and bewildered the American people. Despite the long, confusing tax code and recent debates about abolishing the IRS, it appears that the yearly tax-filing ritual will be around for a while yet. In honor of the income tax birthday and the ongoing problem of tax confusion, Sanford Warren, Millsaps Tax Accounting Instructor, has addressed common myths about the American tax system. A former IRS agent, Warren now serves on the other side of the ledger, advising students and clients about tax issues. Tax law is subject to interpretation based on factual situations.
Small differences can result in widely different answers.
It does not qualify for the special rates. Always establish the facts first, and then ask the questions. This is wrong. The return should be filed before the deadline to avoid needless penalties. Interest may be charged if you do not include the tax payment, but you will at least avoid bigger penalties.