Can the IRS Check the Uncheckable Taxes?

Many readers will undoubtedly recall Thomas A. Daschle. The former Senate majority leader was nominated back in the early days of the Obama administration to head the Health and Human Services Department. Had he survived the nominating process, the savvy politician would have been in charge of health care reform that would come to be known as Obamacare. Instead, his nomination was derailed by revelations that Daschle owed $128,203 in taxes (plus $11,000 and change in interest) for income earned over the previous three years.

At the time, Daschle claimed the mistake was "innocent." Can such an expensive mistake be innocent? Like so many other taxpayers, Daschle had perhaps wrongly assumed that the income in question (a car and chauffeur provided by an employer, for instance) didn't really count as income because it didn't show up on a 1099 or W-2 form. If it didn't show up as income there, would the Internal Revenue Service even know about it?

Short answer: Yes. The IRS figured it out and handed Daschle a big tax bill that promptly ended his political career.

Forbes noted that Daschle's "innocent mistake" is much like the "innocent mistakes" made by folks outside the Beltway. The publication says that "people are for some reason very neglectful when it comes to income and deductions that the IRS can’t easily cross-check." Only 45 percent of those "uncheckable taxes" get paid.

Let's say that your "uncheckable taxes," like the former senator's "uncheckable taxes," somehow get checked by the IRS. The agency then invites you to the Cleveland IRS office to discuss the matter. Forbes advises you not to go. Send a Cleveland tax attorney to the meeting in your place instead. If the agent poses loaded questions, you cannot be enticed to make misstatements or give inaccurate responses. Instead, your attorney will field all questions. If any queries can't be answered immediately, your attorney will discuss them with you. Your lawyer also helps you prepare responses and resolve outstanding tax issues.