It makes sense that some people refer to tax season as a stressful season. The Tax Code is very complex, while the IRS is tough on defaulters. An otherwise innocent and simple mistake, such as filing your returns late, can invite a fine of up to 25 percent. That is why it pays to know your way around common IRS problems that you may encounter from time to time and to seek professional IRS problem help in time. In this blog, we will discuss common IRS tax problems, effective tips for resolution, and ways to avoid tax problems in the first place.
Common IRS Tax Problems
Unfiled Tax Returns
If you have anyunfiled tax returnsfrom previous years, you must file them as soon as possible. Keep in mind that filing your taxes is not the same as paying your taxes. After filing your taxes, explore the payment options that are available to help you extinguish your debt. You can also consult a tax attorney to get professional help for unfiled tax returns. There they will be analyzing your situation and coming up with the best way to move forward.
Garnished Wages
If you are a taxpayer who makes a salary, the IRS may impose a tax levy on your salary in the form of a wage garnishment. You can stop such an action by responding to the notices that the IRS sends before putting wage garnishment into effect. If you failed to respond to the ‘Notice and Demand’, or the ‘Notice of Intent to Levy and Your Right to a Hearing’, and your wages are already being garnished, seek professional help for yourIRS tax problems.Tax attorneys, like Nick Nemeth, will help you negotiate payment terms with the IRS and provide an effective IRS problem resolution.
Tax Lien
In a quest to recover outstanding taxes, the IRS can lay a legal claim to the property. This is known as a lien, and it can be resolved by paying what you owe or promising to do so. Get professional help with IRS tax problems by contacting an IRS tax lawyer. They can help you explore the different settlement methods that are acceptable to the IRS.
Inability to Pay
It is not uncommon for taxpayers to fail to pay their back taxes. If you find yourself in a position where you are unable to pay your back taxes, do not avoid the IRS. Avoiding them will only make your situation worse. There are many avenues available to solve your IRS tax problem, one of which is an offer in compromise. Seeking professional help to see if you qualify and see all your options might be the best next step forward.
Whenever you find yourself facing an IRS tax problem, the best way forward is to confront it and be proactive in moving forward. To eliminate any chance of making mistakes and make sure that you take advantage of the best possible solution for your circumstances, you need to consult with a tax attorney.
Tips on How to Resolve IRS Tax Problems
Receiving a letter from the IRS that says you owe them money even when you have cleared your dues can ruin your day. Every year, several taxpayers face IRS problems like this, and the worst part is that most of them are clueless about what to do. This lack of knowledge, combined with the fear of the IRS, often leads to a situation where the taxpayer ends up committing mistakes that worsen the case. In such situations, the key to solving the dispute is to stay calm and seek help from a professional. If you have beenfacing an IRS problem,do not panic. Simply follow the tips mentioned in this section.
Open and Read the Letter Immediately
As soon as you receive any notice from the IRS, make sure you read the letter immediately. Many people dread opening and reading a notice that they receive from the IRS. Delaying reading the letter may do more harm than good, as you may miss out on some important dates and incur more penalties. It is not always the case that you may have some dues, there may just be some mistakes that you can rectify without any delay.
Call the IRS if You Have Any Confusion
Read the letter carefully and if you have any confusion, do not hesitate to give a call to the IRS. Getting in touch with the IRS is the best way to resolve any kind of dispute. Letters from the IRS are quite long, which makes it difficult to comprehend them. Calling will end the suspense and give you peace of mind. If you are not confident abouthandling a tax problem on your own, hire a tax attorneyfor help.
Check if You Owe Money
If you receive a letter from the IRS, do not panic. Do not even immediately pay the amount mentioned. Check to see if the IRS made any mistake in calculating the amount that you owe. There are instances when the IRS makes mistakes in calculating the amount of tax you owe. You can also seek the help of a professional if you find it difficult to figure out the correct tax amount due.
Know your Rights
As a taxpayer, you have a right to privacy, the right to pay the amount actually owed by you, and the right to hire professional service. You also have the right to be represented by counsel of your choice, such as a CPA or an attorney. You can also get help from the Taxpayer Advocate Service. If you are not satisfied with the outcome, you can also ask the Appeals Office or Court to hear your case. There are many options, so make sure you find out which is best for you.
Those were some of the useful tips taxpayers should follow if they receive any letter from the IRS. Now, let’s look at tips to avoid tax problems with the IRS in the first place.
Important Tips to Avoid Tax Problems with the IRS
Nobody wants to lock horns with the IRS, as it can not just cause a lot of stress, but can also lead to severe consequences such as wage garnishment, or even jail. But, instead of getting intimidated by the IRS, the best thing to do is to avoid the pitfalls that can lead to such consequences. Let us have a look.
1. Make sure you file your tax return on time
One of the most common reasons for taxpayers ending up on the wrong side is that they do not file their returns on time. The first step to avoiding a tax problem is to file your return on time. It is important because a late filing may not just attract a late fee and penalty, but it may also lead to an audit.
2. Simply report what is true
When filing your taxes, do not lie to the IRS, as it has all the means to find out what you exactly owe to the IRS. Do not make any wrong claims, such as claiming the wrong number of dependents, or filing a return claim that your spouse already filed.
3. Do not list too many itemized deductions
If you were planning to claim half of your income in itemized deductions, make sure you do not do that. Chances are that if you go overboard with your listing, then the IRS may choose to audit your file, as it is a red flag for the IRS.
4. Choose the right form 1040 type
There are three types of 1040 form – Form 1040, Form 1040A and Form 1040EZ. Make sure you choose the right form 1040 type depending upon your specific tax situation. Besides these three regular forms for resident individuals, there are other forms for non-residents too. For example – Form 1040NR and Form 1040NR-EZ.
5. Stay up-to-date with your filings
It is important to file your returns when they are due. Even if you are unable to pay your taxes, do not sit on unfiled tax returns, as it invites heavy penalties, interests, and possibly severe tax collection and enforcement actions by the IRS. You can request an extension, get into a payment arrangement, or explore other tax debt relief programs.
Conclusion
Hire a tax law attorney to avoid any errors on your annual tax filings, and if you have landed in an IRS tax problem, consult experienced attorneys at The Law Offices of Nick Nemeth in Dallas, servicing Fort Worth and surrounding areas. We can help you with your IRS tax problems. Our IRS tax attorneys in Dallas have helped thousands of taxpayers get a solution for their complicated tax problems. Do not hesitate to get in touch for a free consultation; call our office at (972) 426-2553 or write to us at info@myIRSteam.com.
