Accidentally cheating on my taxes was the beginning of a nightmare
- READ MORE: Warning about little-known Tax Day mistake
Every year, seven million Americans fail to file their taxes properly — mostly by accident, with a few hoping to outsmart Uncle Sam.
Ever wondered what happens when you mess up? As Business Insider editor Zak Johnson recently found out, a 'dumb mistake' can quickly turn into a nightmare.
In his column titled 'I cheated on my taxes', Johnson told how he forgot to include his W-2 and failed to declare income from a new job — a slip that got him flagged by the IRS.
'There are moments in life when your own stupidity dumbfounds you. The letter I got from the IRS — on my birthday, no less — was one of those moments,' Johnson, who ended up owing more than $10,000, wrote.
The IRS pointed out that the information on Johnson's tax return did not match the information they had available.
That was because he had filed a salary of zero, but the IRS's systems showed he in fact had a salary. Johnson himself admitted 'It was dumb mistake — and the beginning of a nightmare.'
'Not only had I forgotten to attach my W2 in my filing, but I hadn't even declared my salary at BI, which I had joined midway through the year' he explained.
'Without meaning to, I had cheated on my taxes.'
Business Insider editor Zak Johnson revealed he forgot to attach his W2 to his latest tax return
Many who 'cheat' on their taxes are stressed workers who made an earnest mistake
Even accountants have been known to slip up on their own filings.
'It happened to me once, I hate to confess,' retired accountant Richard Rampell told Business Insider.
The IRS sends notices asking recipients to confirm whether they agree or disagree with discrepancies it finds.
But the agency doesn't include how much is owed — and the bill can take months or even years to arrive.
The IRS has up to three years to review filings, and wait times have got longer and longer since the pandemic. During that time, penalties and interest continue to build up.
Johnson ultimately chose to refile and pay more than $10,000 in taxes, penalties, and interest.
He described the process as a game of chicken, saying the IRS essentially waits for people to admit their mistake before issuing a final bill.
Frustratingly, the IRS often already has the correct income data on file. Employers are required to submit W-2s directly to the agency, even if taxpayers forget to include them.
Every year seven millions Americans fail to file their taxes properly
Many countries — including the UK, Denmark, and New Zealand — have systems that pre-fill tax returns for individuals based on the information employers already provide.
A Dartmouth College study found that about half of all U.S. tax returns are simple enough to be handled this way.
Still, Americans spend an average of nine hours preparing their taxes each year, according to the Tax Foundation.
Johnson argued that automating returns could help eliminate avoidable errors, save time, and increase revenue — all without hiring more IRS staff.
