Every consumer has heard the horror stories of time consuming audits and excessive penalties or fees being assessed, but the simple fact of the matter is that there is an incredibly simple way to avoid IRS problems. Contrary to popular belief, the Internal Revenue Service does not place an emphasis on singling out honest individuals and ensuring that they are paying as much income tax as possible. As long as an individual follows a few basic tips, dealing with the government does not have to be a painful ordeal.
Wise individuals will keep all of their receipts and other tax documents neatly organized, and this will certainly prove to facilitate filing taxes in a timely fashion. Missing receipts can cost a taxpayer thousands of dollars in unnecessary taxes. A misplaced 1099 or income statement will cause the reported figures to differ from the records that the IRS is receiving from vendors or employers, and many of these issues will ultimately end in an audit. Ignorance is certainly not a valid excuse for making careless mistakes, and having documents organized and gathered in one particular place will help the process go much smoother. Consumers should always prepare for the possibility of an audit, and an auditor is going to be very appreciative of an individual that maintains appropriate records that can easily be produced.
Preparing and filing taxes does not have to be difficult, but many consumers will procrastinate until the last possible minute or file countless extensions. All documents should be filed in a timely fashion in order to minimize the chances of being selected for an audit. Repeatedly filing for an extension can be perceived as a red flag and trigger unwanted attention from the IRS. Whether an individual needs to seek professional assistance or can perform the task without additional help, complying with all of the deadlines will help avoid many IRS problems. It is important to understand that a tax return must be filed every single year, and a person must ensure that they keep adequate records of each filing.
Many consumers are concerned that if they are unable to immediately pay any amounts owed to the IRS, they will be subjected to criminal charges and face other similarly scary situations. In reality, payment arrangements and other options are available to taxpayers that need assistance. The majority of IRS problems originate from misunderstandings and failing to file taxes on time, so a wise consumer will make sure that they have all of their paperwork prepared and filed before the deadline.
