Tax season can be a stressful time for anyone who is trying to figure out how to file their taxes in a timely and efficient manner. The IRS tax code is complex, and any mistake you make on your tax return can be costly, and cause extensive financial problems. Keep reading for tips on how to avoid common IRS tax problems.
Failure to File with the IRS (On Time or At All)
Generally, your personal tax return is due on April 15th. If you are unsure about whether you will owe or receive a refund, don’t be tempted to skip filing your taxes on time. At a minimum, file a request for an extension (using Form 4868) by April 15. Timely filing the extension request will give you until Oct. 15th to file your tax return. Then, consult a tax professional to answer your questions and assist you with accurate and timely filing by the extended due date. Failing to file your tax return by the deadline can result in the following IRS tax problems:
Penalty
The IRS assesses millions of penalties against taxpayers every year for late filing and failure to file. The penalty can be as much as 25% of the tax you owe, depending on how late your return is filed. Avoid being charged a late penalty by timely filing, even if you cannot pay. or apply for an extension to file your tax return and get the assistance you need to file. An experienced tax attorney can assist you with your questions about the tax code so that you can timely file your return and avoid the late filing penalty and any additional IRS tax problems.
The IRS Files a Return for You
If you fail to file to timely file your tax return each year, the IRS may automatically file a return for you. Allowing the IRS to automatically file your tax return is a bad idea because the IRS will not allow deductions or credits that you may otherwise be entitled to. If this has already happened to you, allow a local tax attorney to assist you with filing any back taxes, and review any penalties assessed against you.
Failure to Pay the IRS
Failure to pay the IRS is one of the most common IRS tax problems that can be avoided. Failing to timely pay the tax you by April 15 will result in a failure to file penalty. It can also result in your account being sent to the collections department. The IRS offers a number of options you can use to avoid enforced collection of the tax you owe:
Payment Plan
The IRS offers a number of payment plans, whether it is for current year taxes or taxes due from prior years. This can be a DIY process, although it is recommended that you meet with a qualified tax attorney to make sure you apply for the correct payment option.
Settle Your Debt
If you feel your tax bill is too large for you to pay with your current income, you can apply for the Offer-in-Compromise (OIC) program. If your application is approved, you can significantly reduce your tax debt. Consulting with a tax attorney is the best way to apply as it can be difficult to meet the qualifications for the OIC program.
Tax Liens and Levies
Another common IRS tax problem is an IRS tax lien or levy. IRS tax liens give the government a claim to any real or personal property you possess, while an IRS tax levy seizes any money or assets you own. IRS tax liens and levies are very serious, and should not be taken lightly. Contact a tax attorney immediately if you receive an IRS tax lien or levy notice to find out what options are available to you to avoid the IRS from putting a lien on your home, garnishing your wages, or taking money from your bank account.
IRS Tax Audits
Perhaps one of the most difficult and common IRS tax problems to address is an IRS tax audit. Tax audits are triggered for several reasons. An audit of your tax return by an IRS revenue agent can result in additional tax owed as well as penalties. If you receive an audit notice or a notice informing you that the IRS is making a change to your return, consult a tax attorney, to ensure that you are given a fair audit and that the IRS is properly determining your income and accounting for all deductions/expenses you are entitled to.
Need Help with Your IRS Tax Problems?
Dealing with the IRS on your own can be a stressful and overwhelming experience. This tax season, don’t hesitate to meet with a licensed tax professional. Contact tax attorney Mindy Meigs for help solving your IRS tax problems.