An individual can get sideways with the IRS in any number of different ways. I recently searched the internet using the following phrase on Google…” Reasons why people get into trouble with the IRS.” This search resulted in 29,700,000 results and was returned to me in .091 seconds. WOW!!!
Given the multitude of ways one can wind up with tax issues, it is easy to understand how the IRS filed over 500,000 tax liens and 1.46 million tax levies nationwide between July 1, 2014, and June 30, 2015. In this post, I am going to outline a few causes of tax trouble that are often overlooked. reasons focus on a few often overlooked.
- Record-keeping-Good record-keeping helps avoid tax headaches. Good records are beneficial for monitoring the progress of one’s business, preparing their financial statements, identifying sources of income, keeping track of deductible expenses, maintaining the basis in property, preparing their tax returns, and supporting items reported on their tax returns.
Unfortunately, many taxpayers are unsure of the kinds of records that they should keep. Oftentimes, they are confused with how long they keep their records to prove the income and deductions on their Tax Returns. It is common to find an entrepreneur who can make money like it “grows on trees”, yet does not have a clue how to properly maintain supporting documents to properly record purchases, sales, payroll, and other transactions that their business generates.
- Tax Return Preparation-Everyone makes mistakes, but mistakes on a tax return can trigger costly IRS Problems. Furthermore, fixing an inaccurate tax return can be surprisingly time-consuming and can sometimes start bigger issues.
This hassle can most likely be avoided by picking a good tax preparer like a certified public accountant to prepare your return. This is especially true if you own a small business, are going through a major life change, or have real estate or investment dealings. In addition to helping you make sure the taxes are filed correctly, your preparer will there for you if you encounter problems down the road.
- Not Being Represented When Facing an IRS audit When it comes to tax audits, the IRS wins most of the time when a qualified practitioner does not represent you. If a taxing authority has decided to audit you, it is important that you do not let yourself be pushed around by the IRS.
Many people do not know that the taxpayer Bill of Rights allows you to be represented by a Qualified Practitioner who can answer questions for you and provide documentation to the IRS. In fact, going or talking to the auditor yourself is the worst thing you can do. Having representation for audits vastly improves your chances for successful tax resolution.
For people who are in trouble with the IRS, there are various programs available that can provide debt relief if a taxpayer qualifies. Keith Jones, CPA can help them determine if they meet the requirements for one of these IRS programs. To schedule an appointment to discuss your tax situation, please call toll-free 844-888-1040.