There are countless misconceptions and myths surrounding the IRS and the tax system that can make it even more difficult to navigate. In this blog, we will be addressing some of the most common myths and misconceptions surrounding the IRS tax agent and irs tax debt settlement. By the end of this blog, we hope to provide you with a clearer understanding of the IRS and the tax system and debunk some of the most pervasive myths and misconceptions. Whether you’re an individual taxpayer or a business owner, understanding the IRS and tax resolution services is essential to avoiding penalties and ensuring compliance. So, let’s get started and demystify the IRS once and for all!
All the work is done by the software.
Whether you do your own taxes or hire someone to do them for you, the software is probably going to be involved. Some people wrongly think that if they just touch the keyboard a few times, voila! Everything is taken care of. Even if the tax software does the math correctly, you can easily get in trouble if you put in the wrong numbers. The CPA knows how to do the real work that saves you money on taxes.
All people who do taxes are the same.
It’s easy to think that anyone could do it. Preparers differ in many ways, such as price, speed, and quality. Contrary to what most people think, not all accurate returns are the same. Accuracy in the tax return means that the tax documents match the information you gave to the CPA firm. It doesn’t mean that it was made in the best way. There are different ways to group deductions, credits, and exemptions. Even though all ways may be technically correct, their tax effects may be very different. You might need help from tax preparers who can advise you and ensure you don’t miss out on great tax savings.
The IRS hires Tax agents to do tax prep.
A lot of people in the U.S. think, wrongly, that tax preparers are part of the IRS and help people with their taxes as a favor. Some even wonder why they have to pay to file their taxes. Laws about taxes change quickly, and often do so after each tax season. You might need a certified public accountant who keeps up with the changes in tax laws and rules to make sure you stay in line. Even though the IRS can do your taxes for you, it might not be in your best interest if they don’t give you any deductions or credits you can use.
Preparing taxes is a seasonal thing
Most people do file their tax returns during a time called “tax season.” Small business owners might have to do their taxes every three months. You can still get help from your tax preparer after May 17 this year for things like settling payments with the IRS, getting audit notices, and bookkeeping, among other things. During the year, you can also use tax planning services to help you pay as little tax as possible. Hire experts who can help you keep more of the money you’ve worked hard for all year.
Lying or making errors may only cause tax audits.
The IRS may audit your income return for reasons other than lying or making errors.
The IRS compares returns to statistical averages and flags discrepancies for examination. Falsifying income or faking a dinner date with your spouse as lunch with a client are red flags.
Truthfulness and accuracy might help you avoid audits. Some audits are unavoidable. Fill out your tax return carefully to avoid audit penalties. More paperwork makes filing taxes harder (and likewise, the more difficult it can be to avoid making mistakes). Yet, a Personal Financial Statement may help you organise your finances and avoid audits due to mistakes.
Everyone with income files taxes.
Taxes are not required for all Americans with income, contrary to popular belief.
Income tax returns are not required for those earning under a certain amount.
However, the IRS advises filing a tax return to be eligible for a refund or credits, even if you don’t have to (like the additional child tax credit, earned income credit, American opportunity credit, etc.).
Taxes only report employment earnings.
Wages, tips, and other compensations often include bonuses, commissions, vacation pay, and scholarships or grants.
Exceptions may apply (for instance, some scholarships or grants may be nontaxable).
Use the IRS’s Interactive Tax Assistant to determine what information to include on your return.
A tax filing extension extends payment.
A common misconception is that a filing extension gives you more time to pay taxes. False. Your payment, which can be high if you pay all your taxes in April instead of with your paychecks, is due in full, no extensions.
If you can’t file your taxes by mid-April, you can ask the IRS for an extension. An extension gives you a few more months to gather receipts and income statements without a filing penalty.
This filing extension is just that—an extension to file.
The IRS is out to get you.
Many people view the IRS as a hostile agency that is out to get them. However, this is not true. The IRS is a government agency responsible for enforcing tax laws and collecting taxes. While the IRS can be tough on taxpayers who don’t comply with tax laws, its primary goal is to ensure that everyone pays their fair share of taxes. The IRS offers resources to help taxpayers understand their tax obligations and to make it easier for them to comply with tax laws.
The IRS will garnish your wages without warning.
Another common misconception about the IRS is that it will garnish your wages without warning. Like property seizures, wage garnishments must follow specific procedures and give taxpayers ample notice. Before garnishing your wages, the IRS will send you a notice of intent to levy your wages. This notice will give you 30 days to pay your tax debt or to request a hearing with the IRS.
The IRS will put you in jail if you can’t pay your taxes.
While it is possible to go to jail for tax evasion or fraud, the IRS generally does not put taxpayers in jail for not being able to pay their taxes. If you cannot pay your tax debt, you can work with the IRS to set up a payment plan or offer in compromise. These options allow you to pay your tax debt over time, without incurring penalties or interest.
The IRS can seize your property without warning.
One of the most common misconceptions about the IRS is that it can seize your property without warning. This is not true. The IRS must follow specific procedures and give taxpayers ample notice before seizing their property. Before seizing your property, the IRS will send you a notice of its intent to levy your property. This notice will give you 30 days to pay your tax debt or to request a hearing with the IRS.
The IRS can seize your property without warning.
One of the most common misconceptions about the IRS is that it can seize your property without warning. This is not true. The IRS must follow specific procedures and give taxpayers ample notice before seizing their property. Before seizing your property, the IRS will send you a notice of its intent to levy your property. This notice will give you 30 days to pay your tax debt or to request a hearing with the IRS.
In conclusion, understanding the IRS and the tax system can be difficult, but it is essential to avoid penalties and ensure compliance. This blog has addressed some of the most common misconceptions and myths surrounding the IRS and the tax system. It is important to remember that not all tax preparers are the same, and accuracy in tax return preparation does not necessarily mean that it was made in the best way. Lying or making errors on your tax return can result in audits, and while taxes are not required for all Americans with income, filing a tax return can make you eligible for refunds or credits. It is also important to note that a filing extension does not extend your time to pay taxes, and the IRS is not out to get you. By debunking these myths and misconceptions, we hope to provide a clearer understanding of the IRS and the tax system and help taxpayers make informed decisions when it comes to their taxes.
