As Benjamin Franklin once said, ‘In this world, nothing can be said to be certain, except death and taxes’. He was definitely right, as anyone who fails to pay his dues or pays less than what he is supposed to pay to the Internal Revenue Service (IRS) can face some serious consequences. The IRS is known to charge such individuals with not only penalties but also the back taxes along with interest. The letters that are often sent by the IRS are often confusing and downright scary, especially if you do not understand them. Avoiding your taxes or filing them incorrectly can end up to be a very expensive and stressful situation for you. There are ways to fix the situation without too much expense or headaches.
1. Seek the Services of a Competent Attorney
As pointed out at the outset, the task of paying back taxes to the IRS can be an expensive affair considering the penalties and the interests that need to be paid over and above the taxes that are owed. To make matters more complicated, the IRS usually sends letters that can often prove to be a bit confusing for most people due to the jargon that may be used in them which is why there is a definite need for an expert who would be able to comprehend exactly what the authorities want. In this sort of a situation, you should hire the services of an IRS tax lawyer, who would be able to guide you accordingly throughout the duration of the process and argue in your favor in order to ensure that you end up paying substantially less than what the IRS demands. The lawyer will start out by helping you understand the situation and then help you avoid the incessant fees and penalties. For instance, if you have a clean record on your past tax returns then the lawyer can argue against the penalties imposed by the IRS and make sure that the whole thing turns out to be far less expensive. On the other hand, if there is any error on the part of the IRS then the lawyer would be able to point that out and force the IRS to drop the case. You might not always be able to notice an error committed by the IRS but the lawyer will and that is the reason why you must always hire the services of a lawyer if this sort of a situation arises.
2. Go Through All Your Tax Return Filings from Previous Few Years
If you are found to have an error on your tax return, oftentimes the IRS will go back through the past few years to see if any other errors have occurred that were overlooked. If you are provided with a notice that your taxes were incorrect, take the time to go over the returns from the last few years as well. You might find a pattern of incorrect behavior throughout the past few years that have caused the errors. If you catch these errors before the IRS, you can file amended returns and avoid serious consequences of the IRS finding the error on their own. If you do find that you owe back taxes, it is best to seek the assistance of a tax professional to ensure that you are not over penalized for the back taxes as they know the proper method for fixing these errors and how to proceed with the IRS in order to avoid serious consequences for your errors.
3. Do Not Waste Time
The IRS are known to set a deadline within which you are supposed to pay off your back taxes with the associated charges; if you fail to adhere to that deadline then there is every chance that the charges would keep rising, which is why you should not waste time in starting the process of paying back your taxes into motion. Assemble all the relevant documents as soon as you get the letter and speak to a competent IRS tax lawyer, who would then get to work in order to get you out of the situation. The sooner you get the experts to work on the appeals process, the better it is for you so that the IRS can’t penalize you extra for being late with your appeal.
If you take care of the basics that have been listed here and make sure that you hire the services of an excellent tax lawyer then there is every chance that you can get away with paying substantially less than what is originally demanded by the IRS. The only way to make sure of this, however, is to use the services of a professional that deals with the IRS on a daily basis.
Being a senior business associate, Peter Davidson strives to help different brands and start ups to make efficient business decisions and plan effective business strategies. With years of rich domain expertise, he loves to share his views on the latest technologies, applications and tax issues through his well researched content pieces. Follow him on Google+.