Industry News - Regulatory Updates
March 9, 2012
Research finds many taxpayers penalized for avoidable lateness, inaccuracy
Many Americans may pay the IRS extra due to procrastination as they fail to file their tax returns by the deadline or allow mistakes to creep in, according to a survey.
About 13 percent of respondents have considered ignoring their tax obligations because the forms are complicated, according to the MasterCard Tax Season Survey, conducted by Harris Interactive. Only 1 percent said they will not pay their income taxes, but 6 percent said they have no idea when they will file their returns.
Additionally, 2 percent are planning or expecting to miss the current deadline, and 10 percent will not file until April, according to researchers. All these choices may increase the risk of or guarantee missing the deadline, which incurs penalties that cost taxpayers extra. At the same time, 17 percent of those surveyed said they guess at some of the numbers on their tax returns, which increases the likelihood of mistakes and audits.
Another potential added expense arises from the tendency to use debit or credit cards to pay taxes, which adds a processing fee. For those using credit cards, TIME magazine states, that fee may be 2 percent of the total paid, not counting interest for those who miss the due date. About 20 percent of respondents intend to use a card.
Day traders and other taxpayers should avoid these behaviors if possible. Filing in a timely fashion will reduce the chance of penalties and mistakes, and may decrease the probability of an audit.