Taxation related issues may seem trivial on face value but they can snowball into serious problems if kept unchecked and not resolved. Even a first time instance or an unintentional mistake is good enough to get the IRS involved, putting your bank accounts, pay-checks, and even liquid assets under the threat of being investigated and/or seized. That is why you must always be in a position to make informed decisions. While professional consultation and assistance is always recommended in tax matters, it still helps to learn and understand IRS matters for yourself. In this blog, we take a closer look at a few common IRS related problems that can lead to undesirable consequences if left unattended.
1. Unfiled Tax Returns
“Taxpayers are required by law to file income tax returns every year in which a filing requirement exists. The IRS may impose a wide range of civil and criminal sanctions on persons who fail to file returns”. (FS-2008-12, January 2008). If unfiled or pending tax returns aren’t filed, they will be recorded and filed by the IRS which will most likely not consider any deductions, expenses, dependents, or even the actual filing status among other tax-saving avenues. Procrastinating when it comes to filing tax returns can lead to serious problems with the IRS.
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2. IRS Tax Investigation
Any tax related problem will eventually lead to a tax investigation by the IRS and having copies of all your tax files gives you a great starting point to get a resolution. The risk of an IRS investigation increases a lot more if you personally request your tax file as you are automatically red flagged. Some of the issues which can lead to an IRS investigation include failing to report your income to the IRS, claiming deductions that exceed the qualified limit, mathematical discrepancies in tax return, and claiming a dependent that has already been claimed by someone else.
3. IRS Appeals
If you are not satisfied with the IRS’ resolution of your tax issue, you can appeal to the Office of Appeals, an independent unbiased third party organization which makes sure that both parties are un-partially heard, and helps you reach a mutually agreed solution without involving the tax court. Two common kinds of IRS tax appeals are “Request for a Collection Due Process” which is generally made when the IRS issues a final notice of intent to levy and “Rejected Offer in Compromise”, which is considered to be the final opportunity within the administrative process to negotiate the submitted Offer in Compromise. Several other appeals exist apart from these.
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4. Payroll Tax Problems
Every employer is required to withhold a certain amount of every employee’s salary to cover their federal income tax liabilities, social security, and medicare taxes, all commonly known as “trust taxes”. If a business has employment taxes that are overdue, the IRS will seize its business assets to recover the dues. This may be applicable to both operating and non-functioning businesses.
If you are facing any of the aforementioned IRS related issues or any other IRS tax issue, it is highly recommended to seek the services of a team of professional tax attorneys to gain insight into your case and help attain a resolution of any tax disputes. Contact the Law Offices of Nick Nemeth to discuss your tax problems and find the best solutions. Simply call (972) 484-0829 or email us at andrea@myIRSteam.com, and we will take it from there.