When Facing the IRS Make Sure You Have A Qualified Tax Attorney

Exterior of the Internal Revenue Service office in midtown New York. (Photo credit: Wikipedia)

Literally dozens of questions can be asked of a tax attorney in Los Angeles. Some of the most important are included within the context of this article. A tax attorney can help you to avoid jail time for long-term tax evasion in some cases and can also help you to reduce payments, interest or even settle on a smaller amount for repayment. Getting in trouble with the IRS is not something you want to do as an individual or as a business owner. 

How to Make a Payment Plan with the IRS to Avoid Penalties and Tax Evasion

After preparing your taxes, you may not know quite how to go about working out a payment plan with the IRS when you owe a considerable amount. It is ideal to seek the help of an attorney as they better understand the policies, laws and restrictions that may be put in place in order to make a feasible payment plan. 

Penalties That Can be assessed

Penalties, mostly from interest, can be assessed when you do not adhere to the agreement with the IRS, are late filing or are late paying. Other penalties can be put into place depending on your situation; some serious penalties can include a wage garnishment or a bank account garnishment. The IRS can also put a lien on your vehicle and/or property until the monies owed are paid.

How to Avoid Penalties

You will want to ask your attorney how to avoid penalties. The attorney may suggest filing for an extension to give you more time to prepare your taxes. In most cases, this is a six month extension. At this time, you must at least have your return filed. The return does not have to include payment at this time. 

How to Keep Better Tax Records

An attorney may be able to help you better organize your tax files. You should ask how to organize receipts and expense reports in order to properly calculate these items into your itemized deductions better. You should also ask what items to disregard keeping records for as some items cannot be deducted.

What Items Need to Be Kept and for How Long?

Generally speaking, tax records should be kept for at least 5-years. This means that you will want to keep all items used to file taxes in a box in storage or in files on a computer for at least five years. This should be items such as W-2’s, 1099s and any other documents proving income or revenues. You should also keep utility reports, vehicle usage reports, business expenses, office supplies and equipment purchased to name a few items.

Keep these questions in mind when you seek the help of a tax attorney. It is also a good idea to keep a list of questions written down to take with you or bring up in a phone conversation. The only way that you are going to better understand what can get you in trouble and how to avoid making mistakes in the future is to ask.

How To Avoid Common Tax Mistakes

When you file your taxes then you need to do it with full carefulness. This is necessary to avoid unnecessary mistakes you may make. To get together your tax return you need to organize all the information. After this double check the returns to ensure that these are accurate and complete. 

When you file the tax return for the first time then you need to be more careful. The common tax mistakes you need to stay away from are: 

1. Missing Social Security Number

This is a very common error made by people while filling the tax form. Do not forget to fill your Social Security Number. IRS gets numerous tax returns every year without or with wrong attached Social Security Numbers. If you make this mistake then it would hinder to process your tax return. Entering the wrong one would lead to rejection of all the exemptions and deductions claimed by you. Moreover, any of your refunds would be put to hold and late fees can be asked for the money you owe to IRS. Double check Social Security Number of yours and your claimed dependents. Look at the Social Security cards to verify it exactly. 

2. Failing to add all the income sources

Add the documentation of your income to tax return. Add the copies of all the W-2 forms received by you in the year. Also add 1099 income as well as any miscellaneous income earned by you. If you fail to add some income received by you then it would give a negative impression about hiding something. This may make IRS have a closer look to your return. It may lead to asking for audit and additional documentation. If you do not have forms to show income from any company then contact that company immediately. Request for 1099 and W-2 from all your employers. 

3. Math errors

Lots of people file the returns manually. This increases the chances to make mathematical errors. Even a small error can make you owe a huge amount of money. If you claim too much income and too less deductions due to math errors then you can find yourself paying more taxes than otherwise. So always double check using a calculator or tax preparation software.

4. Forgetting to add payment

Always check your envelope to ensure you have put your money order or check with tax return. You can e-file as well to make payment electronically. In case you cannot pay the entire amount then you can contact IRS for making payment arrangements.

Author Bio: Leona is a content writer and writes on all the niches of this field. She elaborately covered this topic on how to avoid common tax mistakes. You can place orders of discount checks online unlimited to take care of your financial worries.