Debunking IRS Myths: What Every Taxpayer Should Know

When it comes to dealing with the IRS, many taxpayers are overwhelmed by fear, uncertainty, and misconceptions. These myths about the IRS are rooted in stories told by friends of some distant acquaintance or relative who was steamrolled by the service. These misconceptions along with an lack of understanding of representation cause undue stress and may prevent taxpayers from taking the right steps to protect their rights. Let’s look at a few of these myths and the truth.

Myth 1: "I Can’t Negotiate with the IRS"

Fact: You absolutely can negotiate with the IRS. We don’t recommend doing so yourself. A trained experienced Representation Consultant is the best person to negotiate on your behalf. We can be a dispassionate third party working to get you the best possible short- and long-range outcome.

Additionally, during an audit, as your representative we can explain your position, present supporting documentation, and negotiate with the IRS auditor. If necessary, We can also appeal an audit decision. This is what we do on a daily basis.

Myth 2: "The IRS Always Wins in an Audit"

Fact: This is simply not true. The IRS is not infallible. They are also working on one set of facts and assumptions which may or may not be complete. We protect taxpayer rights and speak for the taxpayer during the audit process. According to IRS statistics, about 20% of audits result in no changes to the taxpayer’s return, while others may only lead to minor adjustments. Furthermore, if we disagree with the findings of the audit, we can appeal the decision. Tax Court is also an option. In that case, we would help the taxpayer find a qualified advocate.

The key is to be well-prepared. We ensure all necessary documentation is present and organized to facilitate and expedite the audit. With the right information and assistance, many audits can result in favorable outcomes for taxpayers.

Myth 3: "I Will Automatically Get Audited If I Hire a Tax Professional"

Fact: The idea that hiring a tax professional will increase your chances of being audited is a misconception. In fact, the IRS is more likely to audit individuals with complex tax situations or those who appear to be hiding income or inflating deductions. A qualified tax professional helps ensure that your tax returns are accurate and compliant with tax laws, which can actually reduce the chances of an audit.

Moreover, as licensed tax professionals can represent you during an audit and help you navigate any questions from the IRS, increasing your chances of a successful resolution.

Myth 4: "I Can’t Afford a Tax Attorney or EA for IRS Representation"

Fact: It’s a common belief that only the wealthy can afford to hire a tax attorney or EA for IRS representation, but that’s not the case. In the first place, most tax controversy matters do not require a tax attorney and are more efficiently handled by Enrolled Agents. Representation can often save you money in the long run by ensuring your case is handled correctly and reducing the risk of paying more than you owe.

Myth 5: "The IRS Will Garnish My Wages Immediately After an Audit"

Fact: The IRS does have the authority to garnish wages, but this is typically a last resort, not something that happens immediately after an audit. Before taking such action, the IRS will send a number of letters and notices. As a representative, if the taxpayer agrees with the outcome of the audit, we work to negotiate the best outcome for our clients.

The important point is that we need to take action. We can’t ignore the problem. It won’t go away. Garnishment occurs after the taxpayer makes it clear that they aren’t interested in resolving the debt through negotiations.

Myth 6: "An Audit Means I’ll Go to Jail"

Fact: While it's true that serious tax fraud can lead to criminal charges, IRS audits are civil matters, not criminal investigations. If the auditor finds strong evidence of fraud, (s)he may refer the matter to the Criminal Investigation Division which will conduct its own investigation to determine if the matter warrants criminal prosecution.

It’s crucial to distinguish between an audit and a criminal investigation. If the IRS suspects intentional fraud or criminal activity, that’s when criminal charges may come into play. However, the vast majority of audits result in adjustments, not criminal prosecution.

Myth 7: "Once the IRS Audits Me, I Can't Dispute Their Findings"

Fact: You have several avenues to dispute the IRS’s findings and your representative will explain each of these options. They range from requesting audit reconsideration through the appeals process, a special kind of Offer in Compromise or even Tax Court.

It’s essential to remember that you don’t have to simply accept the audit results if they’re incorrect or unfair. A tax professional from Books, Taxes & More, can help you navigate the appeal process and present a solid case to challenge the IRS’s findings.

Myth 8: "I Can’t Get Help If I Haven’t Filed My Taxes in Years"

Fact: It's never too late to get help, even if you’ve fallen behind on filing your taxes. It is true that the first step in resolving the debt is being compliant with filings, but that is a simple matter with the help of Books, Taxes & More. We start by filing the delinquent returns as part of a process to determine the actual debt. Once we know the actual debt, we can craft a strategy to resolve the issues and allow you to put this behind you.

Conclusion

Navigating an IRS audit or controversy can be very intimidating, but with representation from Books, Taxes & More, but it doesn’t have to be full of myths and misconceptions. The key to handling an audit or IRS dispute is understanding your rights, knowing the facts, and seeking professional assistance. By debunking these common myths, we hope you feel more empowered and informed about your options. Whether you're facing an audit, have tax debt, rest assured that, Books, Taxes & More is here to help address the situation with confidence and clarity.

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Debunking IRS Myths: What Every Taxpayer Should Know

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