Can you be prosecuted for tax information which would lead to an overestimate in the amount of taxes you owe?

Question

Suppose you pay more taxes than you owe, either because you neglect to use a tax credit or deduction that you could claim, you put $0 for charitable giving as a result of forgetfulness, poor record-keeping, or wanting to avoid overestimating, etc. The end result is that you end up paying more taxes than what you were required to pay. Is this legal?

Also, what happens if you forget about a small transaction? For example, suppose you make $100K at your job, but also made $25 of taxable income selling your stuff to a friend, but you forget to include the latter under taxable income.

Answer 1

The tax man always wins. You can make mistakes to your own detriment, but not to the detriment to the state.

Forgot to take a deduction that was available to you? Perfectly legal. You're not required to “optimize” your taxes.

Forgot to declare taxable income? That is a problem, and you would need to amend your filings. You are required to accurately disclose all of your taxable income.

Of course, not all income is taxable income. For example, occasionally selling personal items for less than their original value (i.e. at a loss) is not taxable.