Will My Employer Tell the IRS About My Income?Articles/News, Offshore Account Update
Posted on June 30, 2023 | Share
If you are wondering whether your employer will tell the Internal Revenue Service (IRS) about your income, the answer is almost certainly, “Yes.” While some unscrupulous companies may choose not to report anything to the IRS, most companies report their employees’ income not only because it is required but also because it allows them to reduce the amount they owe.
The Internal Revenue Code requires employers to report their employees’ income to the IRS. This includes income in all forms—wages, salary, commissions, tips, bonuses and all other forms of employee compensation. Under the law, employers must generally withhold income and FICA taxes from their employees’ paychecks as well, and they must also report and pay over these withholdings in order to avoid serious allegations of criminal tax fraud.
What Employees Need to Know About Reporting Their Income to the IRS
So, what does this mean for you? If your employer tells the IRS about your income, are you still required to report your income, too? What if you don’t owe any additional tax beyond your withholdings? If you are required to report your income and don’t, what are the consequences? What should you do if you haven’t reported your income to the IRS?
Here’s what you need to know:
Employees Must Report Their Income to the IRS
Regardless of whether your employer reports your income to the IRS, you must also report your income on an annual basis. Just like your employer, you must report your income from all sources.
Even if You Don’t Owe Any Tax, You Can Still Be Penalized for Failure to File
Even if you don’t owe any tax, you still need to file an annual return. Under the Internal Revenue Code, taxpayers have both an obligation to file and an obligation to pay. Regardless of whether you owe any additional tax to the IRS, you can face penalties based solely on your failure to file.
The Consequences of Failing to Report Your Income to the IRS Can Be Severe
If you don’t report your income to the IRS, you can face steep penalties. The penalties are even steeper if you owe additional tax. While the IRS imposes civil monetary penalties in most cases, taxpayers who are accused of intentionally failing to report their income can face criminal fines and prison time for tax evasion.
You Need to Be Careful if You Haven’t Reported Your Income to the IRS
If you are behind on reporting your income to the IRS, you need to be very careful. Filing a delinquent return isn’t the best thing to do in all scenarios. A tax attorney can help you protect yourself, and it is in your best interests to speak with an attorney as soon as possible.
Need Help? Contact Us for a Confidential Consultation in New Jersey
If you need to know how to protect yourself after failing to report your income to the IRS, we encourage you to contact us promptly. Call 201-842-7696 or contact us confidentially online to request an appointment with tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.