Saving Yourself from the IRS

Many taxpayers avoid filing their taxes because they are afraid to deal with the IRS or are unaware of the several legal clauses related to their taxes. Even more will file their taxes but will “skip” the truth, so when the IRS contacts them to investigate they ignore the attempts. This is the general sentiment among people required to deal with the IRS. In fact, there are people who don’t even open letters and notices received from the IRS. However, dealing with the IRS should not be a problem, especially if you are aware of your rights and liabilities. Income tax consultants can help you with your IRS tax problems and ensure that the problem does not escalate into a costly nightmare. Here are a few things to be careful about when dealing with the IRS:

Be wary of the IRS tax consultant that you choose:

If you are not going to file your returns yourself and are paying someone else to do the job for you, make sure that the tax consultant you choose has a clean record, and is with a reputable company. If not, it’s possible these tax preparers are fraudulent. These trouble loving tax preparers may have violated IRS rules and regulations. There are several very reputable tax preparation companies out there that have proven track records.

Do not ‘under report’ your income:

It’s best to report all your income and save yourself from an embarrassment, than to under report your income and come under the IRS radar. There’s a complex system that’s set in place to verify your information and compare it with information that is received from third parties. Its best to compare the income you have planned to report, to W2 forms and 1099 forms even before you file.

Be careful when mentioning home office deductions:

There are several criteria and guidelines that should be met to claim exemption under the home office category. It isn’t uncommon for tax payers to claim exemptions on this ground even before they fulfill the required obligations. Thus, before you claim deductions under this clause, make sure that you are complaint with these requirements; especially if you are looking to claim large amounts.

Charitable Deductions:

This is probably the oldest trick in the book, and the IRS is very effecting in sniffing out a rat that wants to claim deductions on the guise of charitable activities. Thus, whenever you claim an exemption for charitable contributions that aren’t in sync with your income, you are likely to come under the tax scanner.

It’s best to become aware of the several procedures relevant to the IRS, or engage the services of a professional income tax consultant who can help you with these problems.