Tax season is upon us. It is easy to make mistakes when putting together tax forms, but some errors are more difficult for the Internal Revenue Service (IRS) to overlook than others. Three blunders that often cause suspicion include:
- Missed “zeros": A recent publication in Forbes notes that missing a zero when reporting your income is not likely a mistake the IRS will forgive. The piece continues by explaining that “IRS returns carry penalties of perjury” and that the potential for IRS tax penalties can increase if the taxpayer is accused of intentionally lying. The best option, according to the piece, is “not to have any direct contact with the IRS.” In other words, hire an attorney to help navigate this situation.
- Failure to report foreign assets: The IRS is cracking down on foreign assets. A failure to properly report ownership or even signatory authority over another’s foreign asset can lead to serious penalties — even prison time.
Multiple blunders: One mistake may be just that, an honest mistake. But repeated issues with underreporting business income, setting up trusts or corporations to hide assets in combination with the above mentioned mistakes can make it very difficult for a taxpayer to explain the mistake.
Difficult to explain? Yes. But, not necessarily impossible. Those who find themselves in this type of situation with the IRS are wise to seek legal counsel. A tax controversy lawyer can review the filings and allegations by the IRS and craft a proper response, better ensuring your legal rights are protected. In the event you have have made a tax error, contact an experienced tax law firm, like Robert J. Fedor Esq., LLC. We can return you to compliance and peace of mind.
