The Ten Biggest Mistakes Taxpayers Make When Dealing With The IRS

The Ten Biggest Mistakes Taxpayers Make When Dealing With The IRS

Generally speaking, taxpayers should never try and represent themselves before the IRS. It’s best to hire a professional (Enrolled Agent, CPA or Attorney) with tax representation knowledge and experience to represent you. They are trained in IRS process and procedure and will ensure that you make use of all your taxpayer rights.

My firm, By The Book Taxes, located in Norwalk, CT specializes in income tax preparation for individuals, families and self-employed people. By The Book Taxes represents clients before the IRS and state taxing authorities to help them resolve their tax debts by preparing and filing Installment Payment Agreements, Offers-in-Compromise, Currently Not Collectible and Innocent or Injured Spouse applications. By The Book Taxes also represents clients in 1040 examinations or audits.

The ten (10) biggest mistakes taxpayers make are:

  1. Automatically filing a joint (MFJ) return if married
  2. Non-filers filing more than the last six (6) years of tax returns
  3. Thinking that the tax return that the IRS creates for you (called an SFR or “Substitute for Return”) if you haven’t filed in a while requires you to file an actual return
  4. Not opening the mail you get from the IRS
  5. Not requesting a “Collections Due Process” (CDP) Appeals hearing
  6. Not securing a loan from a family member with a lien and repayment plan
  7. Not liquidating assets to pay current taxes to get into “compliance” for an “Offer-in-Compromise” or reduced monthly payment agreement
  8. Paying the oldest tax year(s) balances first
  9. Not paying your current year (estimated) taxes first
  10. Trying to deal with the IRS by yourself
The Taxpayer Bill of Rights

The Taxpayer Bill of Rights

Believe it or not, taxpayers actually have rights when dealing with the IRS in an examination (commonly referred to as an audit) or collections.

My firm, By The Book Taxes, located in Norwalk, CT specializes in income tax preparation for individuals, families and self-employed people. By The Book Taxes represents clients before the IRS and state taxing authorities to help them resolve their tax debts by preparing and filing Installment Payment Agreements, Offers-in-Compromise, Currently Not Collectible and Innocent or Injured Spouse applications. By The Book Taxes also represents clients in 1040 examinations or audits.

IRS Policy Statement 5-2 states the four (4) principles that (hopefully) guide the IRS’ Collection Division:

  • All taxpayers are entitled to courteous, responsive and effective service and assistance in all their dealings with the Service.
  • The IRS will observe taxpayers’ rights, including their rights to privacy and to fair and courteous treatment.
  • The public trust requires the IRS to ensure that all taxpayers promptly file their returns and pay the proper amount of tax, regardless of the amount owed.
  • While the IRS will actively assist taxpayers to comply, they will also take appropriate enforcement actions when warranted to resolve a delinquency.

There are ten (10) items in the Taxpayer Bill of Rights. They are:

  1. The right to be informed
  2. The right to quality service
  3. The right to pay no more than the correct amount of tax
  4. The right to challenge the IRS’ position and be heard
  5. The right to appeal the IRS’ decision in an independent forum
  6. The right to finality
  7. The right to privacy
  8. The right to confidentiality
  9. The right to representation
  10. The right to a fair and just tax system

If you have years of unfiled tax returns or owe money to the IRS, please call me before the IRS finds you.  I can help.