Business & Finance Taxes

Five Lethal Bloopers Taxpayers Make

Tax payers make mistakes all the time; some are fixable but others can be lethal.
If you don't know how the IRS collection process works, you should not attempt to do it yourself.
IRS agents will attempt to collect the greatest amount possible, and often have the upper hand when dealing with innocent taxpayers.
However, if you hiring a tax attorney, they can prevent this from occurring and level the playing field.
Mistake #1: Accepting poor behavior from IRS agents.
Many times taxpayers feel that they have to deal with the IRS and some of their rude employees.
But that is never the case.
Don't ever think that just because you owe the IRS money that you have to be treated with disrespect and sometimes incompetent people.
If this ever happens to you by one of the IRS agents, do not take it.
Demand to speak with a manger and require having a new person be assigned to your case.
If that does not work do not worry, you have other options.
You can file an appeal or hearing under the Collections Appeal Program and Collection Due Process to deal directly with the Office of Appeals.
But just always remember that even though an IRS agent has his job to do, does not mean that they have to treat you with disrespect and not handle your case professionally.
Mistake #2: Not knowing what grounds you stand on You should always know where you stand in your case and the position that you hold.
That is why it is always good to read everything that you receive from the IRS; letters, notices, transcripts.
And read it carefully; know what you are reading and make sure you fully understand what your notice says.
If you do not feel that you do not have all of the proper documents and information or that you do not understand it completely, then request for records of your account and perhaps hire a professional to explain things for you.
Ask questions! There is no such thing as a stupid question, so ask as many as you can think of.
This could even means asking questions that could provide you with more help to understanding your case and what you need to help yourself.
Never take for granted that you know where you stand or what will happen for you next in your case.
When it comes to being told new information always make sure you are receiving it on paper and getting in writing! Mistake #3: Never admit to violating IRS tax laws A smart person knows that they should never admit to a crime if they know that they did not commit it.
And a person knows that they should never say anything to the police without a lawyer present; especially if they do not know what crime they are being accused of.
So why would you do that with the IRS? You wouldn't because you are a smart person.
That's why if the IRS starts asking and accusing you of infringed tax laws that you are not perfectly clear on then you should, and do have the right to hire a tax attorney to fight and defend you.
Mistake #4: Ignoring the IRS This is a big NO, NO; you should never ignore the IRS.
Always answer or return phone calls.
Respond to notices or letters sent out by the IRS.
If they are looking for a response from you then respond.
Keep the communication line open between you and the IRS.
By doing this you will get increased cooperation from the IRS that will help you in the long run.
However, if you feel uncomfortable or inadequate, you have the right and can always hire a tax attorney to represent you.
Mistake #5: Agreeing to pay more than you can actually afford If you can afford to pay your entire tax liability, you would be wise to do so as interest and penalties are accumulating daily.
However, this is not a common situation.
The IRS wants their money as soon as possible.
They will ask you to try and get a personal loan, sell assets, or borrow money from relatives.
If you cannot do any of these things, the IRS will want you to set up an Installment Agreement and submit a financial statement, which determines how much you can afford to pay every month.
Most taxpayers do not know how to fill the financial statement out properly causing their monthly payment to be much higher than it should be.
Hiring a tax attorney who knows the IRS collection process can prevent this from happening.
So the rule of thumb to gain from all of this is, "When in doubt call aTax attorney to handle your IRS matters for you.
" You will be thankful you did so in the long run.
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