10 Tax Refund Myths


1
The peel-off label on my return flags my return for audit

In spite of what your friends might tell you, the peel-off label on your tax return instruction book doesn't contain personal information about you or details about the suspicious deductions you claimed on last year's return. It isn't a way to trace your return and it doesn't red flag your return for an IRS audit.

What the label does contain is coding information regarding mail routes and the forms you used in the past. Failure to use the envelope or label the IRS provides will only delay your return. As innocent as it may sound, the purpose of the label is actually just to speed up your refund [source: Payne].

These are just some of the refund myths you might hear this tax season. While you also might receive some good advice from your friends and associates, double-check anything they tell you and don't believe everything you hear.

Related Articles

Sources

  • Begany, Tim. Financial Edge. "6 Tax Myths Everyone Should Know." October 20, 2010 (January 14, 2011)http://www.financialedge.investopedia.com/financial-edge/1010-Tax-Myths-Everyone-Should-Know.aspx
  • Bell, Kay. "Tax refund loan alternatives." January 14, 2010 (January 19, 2011)http://www.bankrate.com/finance/money-guides/cheap-fast-tax-refund-loan-alternatives.aspx
  • Coalition for Taxpayer Financial Choice. "Common RAL Myths" (January 14, 2011)http://www.taxpayerfinancialchoice.com/research_resources/myths.html
  • CalCPA Foundation: "Answers to Taxpayers' Questions about E-Filing" (January 31, 2011)http://www.calcpa.org/content/consumers/ask/2004/mm.03.22.aspx
  • Free Money Finance. "Five Tax Myths." March 2010 (January 14, 2011) http://www.freemoneyfinance.com/2010/03/five-tax-myths.html
  • Herman, Tom. Wall Street Journal (online)."Tax Tip; Time is Running Out to Collect 2006 Refund." March 14, 2010 (January 14, 2011)http://online.wsj.com/article/SB126851748704361883-search.html?KEYWORDS=Tax+Tip+Time+Is+Running+Out+to+Collect+2006+Refund&COLLECTION=wsjie/6month
  • Internal Revenue Service. "Expanded Options for Using Tax Refunds to Buy Savings Bonds." January 4, 2011 (January 26, 2011)http://www.irs.gov/newsroom/article/0,,id=233821,00.html
  • Internal Revenue Service. "Now you can buy U.S. Series I Savings bonds with your tax refund for anyone." January 4, 2011 (January 26, 2011)http://www.irs.gov/newsroom/article/0,,id=217762,00.html
  • Internal Revenue Service. "Overview of IRS Phishing Activity" December 4, 2007 (January 27, 2011)http://www.irs.gov/newsroom/article/0,,id=154861,00.html
  • Internal Revenue Service. "Protect your personal information! The IRS does not initiate taxpayer communications through e-mail." January 12, 2011 (January 27, 2011) http://www.irs.gov/privacy/article/0,,id=179820,00.html
  • Internal Revenue Service. "Refund Inquiries." March 11, 2010 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199566,00.html
  • Internal Revenue Service. "Refund Inquiries." December 02, 2010 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199569,00.html
  • Internal Revenue Service. "Refund Inquiries." December 02, 2010 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199570,00.html
  • Internal Revenue Service. "Refund Inquiries." December 02, 2010 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199572,00.html
  • Internal Revenue Service. "Refund Inquiries." December 02, 2010 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199573,00.html
  • Internal Revenue Service. "Refund Inquiries." December 20, 2010 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199579,00.html
  • Internal Revenue Service. "Refund Inquiries." December 20, 2010 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199581,00.html
  • Internal Revenue Service. "Refund Inquiries." December 20, 2010 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199583,00.html
  • Internal Revenue Service. "Refund Inquiries." January 3, 2011 (January 19, 2011) http://www.irs.ustreas.gov/faqs/faq/0,,id=199576,00.html
  • Internal Revenue Service. "Save for the Future." December 2009 (January 15, 2011) http://www.irs.gov/pub/irs-pdf/p4830.pdf
  • Lewis, Roy. "Top 5 Audit Myths." The Motley Fool. March 17, 2006 (January 15, 2011) http://www.fool.com/personal-finance/taxes/2006/03/17/top-5-audit-myths.aspx
  • Payne, Melanie. "In Murky World of Taxes, Myths Abound: This time of Year, Rumor Mill in High Gear on IRS Practices." Daily News (Los Angeles, CA) February 16, 1997, (January 14, 2011)http://www.thefreelibrary.com/IN+MURKY+WORLD+OF+TAXES,+MYTHS+ABOUND+%3A+THIS+TIME+OF+YEAR,+RUMOR+MILL...-a083856221
  • Roni Deutch Tax Center. "Top 10 IRS Tax Audit Myths." January 8, 2009 (January 15, 2011)http://www.rdtc.com/Blog/archive/2009/01/08/top-10-irs-tax-audit-myths.aspx
  • Snopes.com. "Savings Bonds Refunds." January 26, 2010 (January 31, 2011) http://www.snopes.com/politics/taxes/savingsbonds.asp
  • Strategies for Wealth. "6 Tax Myths You Should Know." (January 14, 2011) http://www.strategies4wealth.com/6_Tax/Myths.php
  • Williams, Roberton and Altshuler, Rosanne. "5 Myths About Your Taxes." The Washington Post. Washington, D.C.: April 4, 2010, (January 14, 2011)http://www.washingtonpost.com/wp-dyn/content/article/2010/04/01/AR2010040102287.html

UP NEXT

What You Can Do Now to Get the Most from the New Tax Law

What You Can Do Now to Get the Most from the New Tax Law

The most sweeping tax overhaul in decades became law in December 2017. HowStuffWorks explains what taxpayers can do to benefit from the tax changes.


More to Explore