The story of Pinocchio is lost to many people. A fairy could tap someone on the shoulder and warn him that “a lie will keep growing and growing, until it’s a plain as the nose on your face,” and that person will then literally (literally, at least for poor Pinocchio) make a jackass of himself on his way home! And his only reprieve from an extended sentence? Good behavior!

As a trial attorney for the IRS, I saw a surprising number of instances in which taxpayers weaved inventive stories and even went to great lengths to create documents to support their tall, and in the case of substantiating claimed deductions, expensive, tales. You might ask, what’s so surprising about people trying to deceive the IRS? Answer: What is surprising is that people fail to appreciate the power of the truth, (or in many cases, silence) when time and again lies exacerbate problems or even create new ones. Read the rest of this entry »