Receiving notices from the IRS can be intimidating, and you may not always know the right way to proceed. Speaking with a tax attorney or an experienced CPA is often a good idea before you respond to any notices or reach out to the IRS directly. You want to avoid a few common mistakes when dealing with the IRS that may lead to harsher penalties or inadvertently hurt your case, and a tax attorney can help you do so.
Being aware of these common mistakes to avoid is important before proceeding.
IRS notices often come with unwelcome news about your tax liabilities and penalties, and you may want to pretend the issue doesn’t exist. But ignoring a notice won’t make it go away. Instead, failing to communicate with the IRS can lead to increased penalties and escalate your case to liens, wage garnishments, and levies.
As soon as you receive a notice from the IRS, reach out to an attorney for assistance responding. They can help you determine the right way to proceed and avoid missing deadlines.
Accuracy is key when dealing with the IRS. One of the common mistakes to avoid is guessing on tax returns and assuming the IRS won’t notice. Listing incorrect deductions, including inaccurate documentation, or having unreported income are all issues that the IRS is capable of finding out about.
Making tax filing errors, whether intentional or unintentional, can lead to complications and even accusations of tax evasion, depending on the severity of the error. If you aren’t sure whether the information on your tax returns is correct, work with a tax professional for assistance.
If you have back taxes or the IRS has notified you of significant tax debt, you may assume that you have no choice but to pay it. Similarly, if you received notice of a collection decision from the IRS and disagree with the agency’s findings, you might assume that you have no way of appealing the decision. These are other common mistakes when dealing with the IRS.
Taxpayer rights include the right to appeal and the right to apply for tax debt relief programs in certain situations. You also generally have the right to be informed, the right to challenge the IRS’s decision, and the right to legal representation.
Failing to explore all of your options could leave you paying more in tax debt or hurting your financial situation more is necessary to resolve the issue.
The IRS has strict deadlines in place for filing annual tax returns, making late payments, and completing other actions. When the IRS provides you with a deadline, take care to complete the requested action within that timeframe.
Missing deadlines can result in interest charges and late payment penalties, which will increase the amount you owe. This can prove detrimental if you are already struggling to pay your tax debt.
If you can’t afford to pay your tax bill, speak with a tax attorney about setting up an installment plan.
One of the more common mistakes when dealing with the IRS is assuming that you need to handle the issue alone. You have the right to seek assistance and representation from a tax professional, such as a CPA or tax attorney. They can help you understand your options and represent you in IRS communications.
Levy & Associates, Inc., represents clients facing a range of IRS issues. Contact us today at 800-829-5389 or fill out our contact form to request a consultation with our tax professionals.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.