Saving & Spending Taxes

8 Biggest Lies About the IRS You Should Stop Believing

Don’t believe everything you see on TV — the IRS is actually a lot less scary than the lies suggest.

bookkeeper using calculator counting taxes fees
Updated May 28, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

When you think of the IRS, do you picture a building full of accountants combing tax records to catch you in a mistake, then cackling as they dispatch a league of bounty hunters to kick down the door and drag you to tax jail?

Or, do you envision a series of drab offices filled with outdated technology from the 1960s, phones ringing off the hook nonstop, and a team so understaffed it cannot answer?

One of these visions of the IRS is more accurate than the other — and it isn’t the tax-collecting fleet of Boba Fetts.

In all likelihood, the IRS is much less frightening than what you have been led to believe. Let’s take a closer look as we try to reduce your financial anxiety by debunking a few lies about the IRS.

Steal this billionaire wealth-building technique

The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.

A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.

If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)

The IRS will bust down your door to collect unpaid taxes

gearstd/Adobe  male open hand appearing through white doorway and businessman making kicking gesture

Have you always thought of an audit as an action-packed raid complete with handcuffs, a guarded van, and a squadron of bulky law enforcement officers? We almost hate to disappoint you, but the reality is that the IRS rarely makes house calls.

If your taxes are overdue, the worst thing you’re likely to receive is a letter in the mail politely requesting that you make a payment at your earliest convenience. Even in the event of an audit, you’ll probably get a letter requesting additional documentation.

A few people do end up with IRS revenue agents on their doorsteps. If that happens to you, we can guarantee your agent will be much more like Will Ferrell’s frazzled everyman in “Stranger Than Fiction” and much less like Arnold Schwarzenegger’s band of fighters in “Predator.”

Pro tip: Having trouble paying your tax bill? Consider one of the many great ways to make extra income.

Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.


The IRS will call you if taxes are overdue

DC Studio/Adobe Company employees offering assistance and support to people at customer care service

When you don’t pay taxes on time, the IRS will notify you quietly through snail mail, not via a phone call.

Instead of escalating threats, you’ll simply get an increasingly boring series of letters reminding you to pay your taxes, along with helpful, detailed instructions on how to do so.

However, that doesn’t mean you can ignore these requests simply because they are polite. If you do not pay Uncle Sam, eventually the gloves may come off.

The IRS is getting 87,000 new agents to audit Americans

LIGHTFIELD STUDIOS/Adobe asian translator working online with headset and laptop in office

First things first: The IRS likely isn’t actually getting almost 90,000 new agents. The 87,000 number appears to come from a 2021 Treasury Department estimate of how many employees must be hired to meet staffing needs as people retire from or otherwise leave the IRS.

The actual number of agents who will be hired remains unclear at this point.

Government officials say increased funding for the IRS should mean the agency will have the resources to pursue high-income tax evaders. The White House estimates the richest 1% of earners evade $160 billion in tax payments each year.

With more money, new staff, and better technology, the IRS should have the time to scour the complex tax returns of higher earners.

Resolve $10,000 or more of your debt

Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1

How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.

Try it


The IRS is likely to jail you for not paying your taxes

RomanR/Adobe Illegal crime time dollar and handcuff tax form

Yes, infamous gangster, Al Capone was caught and imprisoned on charges of tax evasion. But as long as you’re not one of the most notorious gangsters of the Roaring ‘20s, it’s unlikely the IRS will send you to jail for unpaid taxes.

The risk of going to jail increases if you go beyond not paying your taxes and commit tax fraud. In 2017, there were 584 tax fraud convictions, with 59.1% of the offenders being sentenced to jail, according to the U.S. Sentencing Commission.

 

The IRS never negotiates

Nuthawut/Adobe miniature people businessmen handshaking standing on TAX minus button on calculator

If you can’t afford to pay your taxes, you don’t need to go on the run from the law. The IRS has a variety of options to help you pay what you owe — none of which involve sending you to jail just because you don’t have enough money for taxes.

For instance, if you can’t pay your taxes by the tax deadline, you can request an extension of up to 120 days. If that isn’t enough time for you, apply online for an individualized repayment plan that will work with your budget.

If neither of those solutions works for you, the IRS also accepts requests for payment compromises. The government will look at factors like your expenses, income, and ability to repay your debt. Then, the IRS will work with you to negotiate a lower amount you can pay without incurring financial hardship.

Claiming a home office deduction will trigger an audit

mrk3PHOTO/Adobe businesswoman working in home office with corgi dog

If you claim a disproportionate amount of deductions on your taxes, you might raise a few eyebrows at the IRS. But simply listing a deduction — including a home office deduction — won’t automatically trigger a closer look at your taxes.


The IRS doesn’t require taxes on illegal activities

Animaflora PicsStock/Adobe pickpocketing

We assume you didn’t make most of your money last year doing something illegal. But on the off-chance that you did, you’re still expected to pay taxes on any income you earned illegally.

Did you steal someone’s property? Unless you return it within the tax year, you owe taxes on the amount stolen. Did you profit from drug sales? Yep, you have to pay taxes on that income too.

Not paying taxes on illegal income is exactly what landed Al Capone in jail.

 

The IRS is fine with you claiming a pet as a dependent

Photoboyko/Adobe  Staffordshire terrier and human dressed in same t-shirts

The tax code doesn’t explicitly state that only humans can be claimed as dependents on a tax return, but that’s presumably because the writers of the code thought it was self-evident.

In case you’re wondering, though: No, you cannot claim a pet as a dependent on your tax return. So, please don’t try.

Bottom line

Pormezz/Adobe stressed man

Yes, taxes are complicated, and filing can be scary. Making a mistake sometimes does have financial consequences.

But the IRS generally is not as frightening as it’s been made out to be. Good luck filing taxes this year, and remember that as long as you’re reporting all your income, you will avoid key money mistakes that can get you in hot water with the feds.

Easy Tax Relief Benefits

  • Eliminate your tax debt
  • Potentially reduce the amount you owe
  • Stop wage garnishments and bank levies
  • Communicates with the IRS on your behalf