In our last post we began to look at common tax problems, from a Forbes Magazine article called “The Top 10 Most Litigated Tax Issues.” These tax problems – and the process of dealing with them – can be very high-stakes situations that, as we say, can “destroy the life and business you have built because you do not know how to defend yourself.” And these are situations where you definitely do NOT want to stand alone. Let’s continue with the list of…
Common IRS Tax Problems
Tax Problem 5: Accuracy-Related Penalties
These are IRS penalties that result from the underpayment of taxes. In some cases, taxpayers have successfully (and some unsuccessfully) argued that the tax preparer was at fault.
Tax Problem 4: Trade or Business Expenses
Many aspects to this one, most involving the taxpayer’s inability to justify deductions. Failure to properly separate business and personal expenses. Failure to produce receipts. Improper home office expense deductions, etc.
Tax Problem 3: Summons Enforcements
The IRS has the right to examine any records and other documentation related to a civil or criminal tax case. If you refuse to cooperate, the IRS may turn to your employer or your bank, which can be inconvenient and embarrassing.
Tax Problem 2: Gross Income
As in, failing to fully report of gross income. Income from multiple sources, cancellation of debts, beneficial court settlements, inheritances, etc.
Tax Problem 1: Appeals from Collection Due Process Hearings
Less of a problem than a possible remedy. If you have been through due process with the IRS, and have a judgment against you, this is your opportunity to appeal the ruling and request an independent review.
One thing you might take away from this list (parts 1 and 2) is the sheer number of ways you could find yourself in the midst of an IRS problem. The IRS has a big toolbox and tremendous discretion in dealing with your tax problems. Shouldn’t you ALSO have tools and allies at your side when that time comes?
Contact IRS Away Today
The IRS Away team offers free consultations and peace of mind knowing that your IRS tax problems are being dealt with effectively and professionally. Contact tax attorney Joseph M. Arndt III at (803) 771-4037 for a free consultation.