Compliant or Complaint?

Today TaxMama hears from Diane in Alabama, with a quick question: “What do you think it means to be compliant with your tax returns?”

Well Diane,

It’s not a sexual, sexist or S&M term.

In fact, I don’t remember seeing IRS use the term compliant.

Although, IRS is quite specific about what being “in compliance” means – especially when you’re trying to buy time or concessions for someone who’s not compliant.

For individuals, it means

  • 1) You file all your tax returns on time, including an allowance for extensions.
  • 2) When you file your tax returns, the information is truthful
  • 3) Tax laws have been followed in the preparation of those tax returns. You didn’t just make up rules to suit you.
  • 4) You have the appropriate amount of withholding from your paychecks; or submit the proper amount of estimated taxes throughout the year.
  • 5) If you owe money when you prepare your tax returns (of any kind), you pay the balance due with the return.
  • 6) Or if you cannot pay the balance due all at one time,
    • a) you set up an installment agreement (IA) and pay it off, according the terms of your IA.
    • b) In the meantime, you update your withholding and estimated payments to avoid owing money at the end of the next year.

True, it’s often tough to do. I often hear non-compliant’s complaints – about the penalties and hardship of getting caught up.

And remember, you can find answers to all kinds of questions about tax compliance and other tax issues, free. Where? Where else? At

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