The Best Way to Resolve an IRS Dispute is to Avoid it in the First Place: Five Steps to Stay Out of Trouble

Nick Nemeth | My IRS Team | Dallas Tax Attorney

Our practice is focused on helping taxpayers resolve their IRS problems once and for all. As you know if you have ever faced a dispute with the IRS, it can be an extremely stressful and unpleasant experience. Our mission to help taxpayers get through these difficult times and get back to enjoying life.

Of course, the ideal course of action is to avoid IRS problems in the first place. And as this year’s tax filing season wraps up, now is a good time to look ahead to the future and ensure that you’re taking steps to avoid IRS trouble. Below are five keys to keep in mind.

1) If you’re self-employed, withhold income from each check. If you are self-employed, you can’t depend on your employer withholding taxes from your paycheck in order to ensure that you are able to pay your bill each year. It is up to you to plan ahead and withhold a portion of your income—and failing to do this often results in a tax bill that you can’t pay. 20% is often a good amount to withhold, but you may need to adjust that number up or down depending on your specific situation.

2) File on time. This is simple advice, but many taxpayers get themselves in trouble because they don’t do it. Even if you have a complicated situation, even if you can’t afford to pay your taxes—make sure you file on time. Otherwise you will face significant penalties and further complication.

3) Document your deductions. If you are claiming deductions beyond the standard deduction, it is critical that you carefully document them. The IRS often looks at deductions very skeptically, and a high level of deductions can raise red flags at the agency. This isn’t intended to scare you away from claiming deductions that you are legally entitled to—just a reminder to be sure that you can substantiate them if the IRS demands it.

4) Keep careful records. Beyond your deductions, it’s important to maintain careful records of income, expenses, and other circumstances. It’s important that you….

 
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