When tax forms demand irrelevant information -- what if you refuse?
When tax forms demand irrelevant information -- what if you refuse?
Some tax forms ask information that seems to have no effect on the bottom line. No matter how you answer the question, your tax bill is the same either way. In Europe, this sort of thing would violate the data minimization principle of the GDPR. So the question is, what happens to people who either leave the intrusive fields blank, or they give bogus info? I’ve heard that tax penalties are generally a constant × the amount of underpayment. If underpayment is zero then so is the penalty, correct?
In general, if you come to the correct number nothing will happen. You are technically committing perjury if you knowingly put incorrect information on a tax form, so I would avoid doing that to make a point. Do you have any specific examples of form fields you feel are overly intrusive?
Off the top of my head I recall questions about the taxpayer’s occupation, whether foreign bank accounts are held by the taxpayer and whether any digital assets are held. I think some forms (1116, perhaps) ask for country of residence but IIRC this has no influence on the calculations.
Accounts and digital assets seem directly applicable to assets held. Occupation sounds like it could have to do with tax credits, if you're in something that's subsidised.
Residence is weird but in the opposite way, because usually countries don't tax residents abroad. 'Murca is the exception there, although I don't know all the exact details.