What is the purpose of filing a tax return?

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Frances Bott answered
The purpose of filing a tax return is to avoid legal difficulties that may ensue if the return is not filed. While many people hate filling out tax returns that declare all of their income from the year (as well as information about student loans, tax deductions, dependents, etc.), they need to do it, because it's the law that such returns must be filed. Since the days of King Henry the Eighth, tax collectors have been there to take a hefty percentage of income from ordinary citizens.

  • Taxes fund government services

Today, (in marked contrast to the brutal Middle Ages) social programs, government institutions, the educational system, and (in some countries) health care are all financed through tax dollars collected from the people. However, tax collectors no longer roam the villages, demanding coins, chickens, and other forms of currency or collateral; instead, tax returns are filed by the populace, and then these tax returns are reviewed by government tax officials. 

  • Tax problems can occur

When proper, correct tax returns aren't filed, a person can be prosecuted, and they may face some serious legal challenges. People who lie on their tax returns are also subject to heavy penalties. Many celebrities have tried to cheat the government out of tax dollars - one example is Hollywood action-film star, Wesley Snipes, who needed to go to prison for his crimes.

Another person who tried to evade paying his taxes was former hip-hop sensation, MC Hammer. When the government chooses to crack down, they can make life extremely miserable for tax evaders.

Paying taxes is the law - however, the super-rich have plenty of ways to minimize forking over their cash. It's been proven that people with plenty of wealth use lawyers and smart accountants to reduce their tax debt, through loopholes in the tax system.

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