A tax dispute with the IRS is the stuff of nightmares for almost every taxpayer, causing sleepless nights and making many taxpayers break out in a cold sweat at the thought of this situation. There are many horror stories about the IRS and the abuses that this agency has performed in the past. The odds are that at least one friend, relative, or coworker has found themselves in a tax dispute with the IRS and ended up losing money, time, and even sleep because of it. An IRS tax controversy can have a damaging impact on taxpayers. We have seen firsthand how devastating IRS disputes can be for hardworking people, and we battle the IRS relentlessly to defend our clients and enable them to get on with their lives.
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, and things to do when you land in a tax dispute with the IRS.
Five Ways to Avoid a Tax Dispute with the IRS
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 underreported. It will lead to significant difficulties in the future. It’s just not worth it. If you have an IRS tax debt, it is better to find help to settle it rather than under-report your income. Settle your IRS tax debt to stay clear of tax problems. You can discuss with a Fort Worth IRS tax attorney for help about the tax debt relief programs that may be useful for you.
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. It 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 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.
Five Ways to Minimize the Damage from an IRS Tax Dispute
The IRS can be quite aggressive when it comes to IRS tax disputes. It can be seen with firsthand stories and actual cases where the agency has overstepped their boundaries, or with agents who were out of control in attempts to collect a tax debt that they believe is owed. It is important for consumers to understand that you can keep control in a tax dispute with the IRS, but only if you act quickly and know what steps to take to keep this type of situation from spiraling out of control. There are strategic mistakes that can make your situation worse, and these should be avoided at all costs.
1. Keep panic out of the equation
When you receive a communication about an IRS tax dispute or tax debt, the first thing that many people do is start to panic, and you need to avoid panic and keep your wits about you. The IRS is a very intimidating agency that no one wants to deal with, whether you are being contacted by mail, by phone, or in person. The IRS relies on fear and intimidation tactics in order to get taxpayers to comply immediately. Remember that there are laws that the IRS MUST follow, and the IRS will not advertise this fact, but you do have rights as a taxpayer in the USA.
2. Meet Tax Deadlines
Look at the communication from the IRS closely. After you have successfully pushed the initial panic away, look at the letter or notice that you have received from the IRS and read the entire correspondence carefully. What is the agency asking you to do, or what do they want you to provide them? Make sure you understand what is needed and when you are expected to return it by. Pay close attention to the deadline given by the IRS. You should always take care to meet any deadlines. It may be tempting to ignore the issue or bury your head in the sand, but this will not make the IRS or any tax debt go away. The IRS is not going to forget about you or disappear. If you do not provide the information or documentation required by the deadline, it will only make things worse. Before you do anything, it is essential that you know what you are supposed to do and when.
3. Gather Tax Documents and Proofs
The IRS insists on documentation if they question any aspect of your tax returns, and you need to have your records in order so that you can document your case to the agency. You should have an experienced tax attorney work with you so that you avoid the most common mistakes and resolve your case in the best possible way. Gather all the documents and documentation that you will need and put them in order. When you are involved in any tax dispute with the Internal Revenue Service, documentation is critical. The more you can document the data and information on your tax returns and filings, the better you will be able to defend these filings and be successful in any tax dispute with the IRS. Get all the documentation for your tax dispute and keep it together in an organized fashion.
4. Provide Only the Information Requested
Only provide what the IRS asks for. Many taxpayers want to show complete cooperation, and this often means turning in more than what was requested by the IRS. When this is done, the IRS is given the opportunity to closely examine all the information and documents provided, not just the information that they asked for. This can complicate the tax resolution situationeven further and actually make things worse. Only provide the information and documents that are requested by this agency, and nothing else. When you volunteer extra information, you may think that you are being honest, but you are actually complicating matters. Giving the IRS more than they want will only open up other possible areas of scrutiny for the agency.
5. Consult an attorney for tax dispute resolution
Many people feel that they did nothing wrong, so there is no reason to involve a legal professional, but this is a huge mistake. The IRS does not always play fair and will not defend your rights as a taxpayer, only a tax attorney will. Contact an experienced Fort Worth attorney who deals with the IRS on a regular basis, one who understands this agency and the current tax laws very closely. Tax attorneys at the Law Offices of Nick Nemeth are experienced in tax dispute resolution. Trying to take on the IRS without an attorney is usually a big mistake, one that can be very costly. The IRS will try to be aggressive, intimidate you, and even bully you into complying with their demands. Our experienced tax attorneys will not be bothered by these scare tactics, though, because we know the tax laws and the limits of this government agency. Our Fort Worth tax attorneys can put the IRS in check for you, providing support and legal advice every step of the way.
Final Word
No one wants a tax dispute with the IRS, but if one is started, it is essential to take action quickly in order to minimize the damage. Experienced Fort Worth tax attorneys at the Law Offices of Nick Nemeth can help you with tax dispute resolution or even explore tax debt relief programs. For a free, no-obligation consultation, simply call (817) 623-5399 or fill out our contact form, and we will take it from there.
