What Not To Do When Facing A Tax Problem
When most people think about the kinds of issues that can arise with paying taxes, being unable to pay the amount due or being the subject of an audit most frequently come to mind. These tax problems are serious, but with the right assistance can be favorably resolved. The way you react to “bad tax news” sets the tone for your case, and can mean the difference between a satisfactory result and near disaster.
Many taxpayers mistakenly believe that when the IRS comes knocking, there is little that can be done. This is simply not true, and here is a list of common tax issues and what NOT to do if you are facing one of these tax problems:
- Paying less that what is owed: This can happen if you filed an improperly prepared return, and can result in fines and penalties. But, rather than simply accept what the IRS says you owe, ask for a review. You have the right to question how the agency arrived at a different figure, and come to a conclusion that may be more in line with what you were expecting to pay.
- Taking deductions to which you were not entitled: This most frequently arises when people list out expenses associated with a business. This is because the more expenses you have, the less income you will be required to report. The problem comes when you take a deduction that does not apply to your situation, and do not have the paper trail to back up what you’ve claimed. To avoid this tax problem, keep accurate records of your expenses, and be ready to produce those records if asked.
- Failing to file on time: This tax problem may be the most easily avoided. If you are having trouble gathering the documents needed to prepare your return and short on time, simply ask for an extension. For late filed returns where no extension was granted, the fines and penalties are high. But, if you have asked for more time to file, you will face a lesser fee for not meeting the filing deadline.
No one invites an audit or investigation into their taxes by the IRS, but if you do happen to receive notice that you are being reviewed, act quickly and smartly. Calling a knowledgeable legal tax professional should be your first step. From there, a plan of attack can be developed that meets your needs. Call our office today to learn more.
Let the professionals at Nielsen Law Group help you make sure you abide by the IRS rules and regulations when filing taxes, or for other tax related issues. Call (480) 888-7111 or submit a web request here.