It’s commonly said that people should face their fears to overcome them. For instance, if you’re afraid of the dark or heights, gradually expose yourself to environments where you can confront this fear while still feeling safe. However, this solution might not be much help if you fear the Tax Man.
According to a recent survey, 80% of millennials are afraid of the U.S. tax system. Unfortunately, outright avoidance or even gradual exposure are not effective ways of addressing this fear.
Filing your taxes is not something you can simply choose to do. You cannot pick and choose if and when you file, and you cannot partially submit a return. If you leave out certain information or fail to properly complete your return, the Internal Revenue Service (IRS) will come asking questions.
Avoidance won’t work, either. If you ignore letters from the IRS, the problem will not go away, and you might make matters worse by trying to run. Interest and penalties will stack up, making it more difficult to resolve the situation.
Whatever your tax problem, there is a resolution. You only need to communicate, cooperate and meet the IRS-imposed deadlines once you finally make the call.
Nonfilers: If you are missing previous records, the IRS has copies of all third-party documents – including K-1s, 1099s, W2s, etc. Simply request a transcript and fill in the blanks from your other records.
Tax Liability: Don’t wait until you try to make a withdraw at your bank to find out that the IRS has seized your balance. Avoid taking a head-in-the-sand approach and call the agency to explain your situation. Ask about an Offer in Compromise in which you can negotiate to pay less than you owe, or the IRS may set up a payment plan.
Audits: If you fudged a little (or a lot) or simply made a mistake on your return, come clean and cooperate. You’ll likely earn little more than a slap on the wrist and possibly a negligence penalty.
When someone dodges the IRS, it becomes major news, and it instills fear over an agent showing up on your doorstep – and that’s exactly how the IRS wants it. After all, fear increases compliance. Still, most IRS auditors will tell you that the agency doesn’t seek to incarcerate taxpayers; it’s more beneficial if taxpayers are working to bring in revenue to settle their tax liabilities. Communicate with the IRS, and you might be pleasantly surprised to find they’re more than willing to work with you.
Call us if you have any issues with the IRS at 720-398-6088 as we would be happy to navigate you through the IRS systems.