An IRS dispute is something that no taxpayer wants to be involved in, and a letter notifying you of an IRS dispute or audit can be the worst thing in the mailbox. The Law Offices of Nick Nemeth specializes in representing taxpayers who have a tax dispute with the IRS, We will work diligently to ensure that the entire process is as stress free as possible, and get you the most favorable terms that the tax code and laws allow. It is better to head off trouble before it can start, so we are providing practical tips that can help you avoid an IRS tax dispute in the first place.
1) Always proofread and double check your tax return carefully. Look for math mistakes, misspelled words, and other common mistakes that will get the attention of the IRS. If you list your address with the wrong spelling or with two of the house numbers transposed this can cause your return to be flagged for further review. Even forgetting to sign the return could cause you to be audited. Take the time to make sure everything is correct before you file your tax return.
2) If you donate to charity in an excessive amount make sure that these donations are substantiated and documented. The United States tax code encourages charitable contributions but it is expected that your charitable giving is in line with the income that you make. If you honestly donated a considerable amount then you should claim this, but make sure you can back up the claim with proof because your tax return is more likely to be flagged for further scrutiny and a possible audit.
3) Never use a tax preparer that is disreputable or unethical in any way. There are many tax preparation companies and individuals who are willing to break the law so that your tax liability is reduced, but when the preparer is discovered you will end up right in the middle of the mess. Your tax returns could be audited, your deductions could be disallowed, and you could end up owing the tax man a large chunk of money as a result of using a less than reputable preparer for your taxes.
4) Only claim tax credits that you truly qualify for. The IRS allows many different tax credits for taxpayers, but only if the taxpayer actually qualifies for the credit. Before you claim a home buyer credit or list a child care credit make sure that you meet the criteria to qualify.
5) Always report all income that you have, never try to hide earnings or income from the IRS. If you try to hide income from the agency this can bring serious trouble. It may be tempting to fail to report cash payments, tips, and other types of income in the belief that the IRS will not catch you but this should be avoided. If the IRS suspects that you have concealed income the audit process will be especially painful and drawn out.
6) Don’t claim a dependent that someone else can claim. If you do this then you can expect the IRS to give your return more attention and scrutiny.
7) Business losses cause suspicion at the IRS, so never claim any business deductions that are not legitimate or that you ca not back up with proof. This is really true if the business has been operating for more than a year. If you have real business deductions and losses then you should claim these, but be prepared for the extra attention and higher audit risk that this involves.