Known as the IRS, the Internal Revenue Service is a bureau of the Department of the Treasury which was created by the United States government to collect and manage federal taxes. The IRS was given full authority to administer and enforce the internal revenue laws.

According to the IRS it is the most efficient tax administrators in the world. In 2005 the IRS spent 44 cents for every $100 it collected from taxpayers. Just because the IRS is efficient does not mean it is very well liked. You worked hard for your money and it stings to see so much of it going to the government. Even if it stings, make sure to file that return.

If you do not file a tax return then an IRS employee might do it for you. More than likely you will owe more money that way than you ever would if you file a tax return yourself. If you owe money and don’t file by the deadline then the IRS will charge you interest on that money you owe them!

The good news is that if you goof up on your taxes and show a good effort to comply with them they will work with you also. If you try to evade the IRS repeatedly you could end up in court. Although jail is a possibility for tax dodgers it is usually reserved for the very worst cases of flagrant tax fraud. Try to be honest with the Internal Revenue Service and you won’t need to worry about these penalties.

There are two common parts of tax returns you should know about. The 1099 and W-2 forms