Our passion is protecting taxpayers from the life-damaging impact of an IRS tax controversy. We have seen firsthand how devastating IRS disputes can for hardworking people, and we battle the IRS relentlessly to defend our clients and enable them to get on with their life.
But, as a taxpayer, the best way to overcome an IRS dispute is to AVOID it to begin with. In that spirit, today we are going to identify five important steps you can take to stay out of the IRS crosshairs and avoid IRS trouble.
1) Don’t under-report income. Yes, it is tempting to under report income when you are filing your taxes– who doesn’t want to keep more money in their pockets? But the IRS uses a variety of sophisticated methods of detecting income, and it’s very possible that they’ll recognize that you’ve under-reported. And that will lead to a whole lot of pain down the road. It’s just not worth it.
2) Save your supporting documentation. If the IRS is questioning your tax returns, the very first thing they will do is ask for documentation of claimed deductions, tax credits, expenses, and more. If you can’t produce this documentation you may see your tax bill skyrocket, and a messy IRS dispute is likely to follow. Save those documents!
3) Avoid double-claiming dependents. If you claim your children as dependents, but somebody else does too… you’re going to have problems. This includes your children filing their own returns as independents. Ensure that nobody else is claiming your dependents, because if they do, the IRS will consider it a major red flag.
4) Double check your arithmetic and proofread your return. The last thing you want when you are filing your taxes is to give the IRS any reason to look further into your tax return. So avoid careless mistakes – double check all of your arithmetic to make sure everything adds up. And double check all of the details – make sure you have signed everywhere you are supposed to, spelled your name properly, provided the right social security number, mailing address, and so forth. The extra thirty minutes it takes to proofread everything could save you months and months if your mistake results in an IRS audit.
5) If you are contacted by the IRS for an audit, talk to a tax professional immediately. Every taxpayer dreads the possibility of being audited by the IRS, and for good reason. But if you ARE audited, it’s important to immediately seek professional guidance. The wrong audit strategy can result in a true IRS nightmare, so don’t go it alone.
If you’re facing an IRS dispute, we can help. If you’re not, consider yourself fortunate… and make sure you follow these tips to keep yourself out of trouble!