WARNING! The IRS is watching you!
"Almost everything you do each day, certainly every check transaction, credit card transaction, long distance telephone call, and financial application with banks, is recorded and the IRS has access to it."
- Attorney, Michael Louis Minns, from his book "How to Survive the IRS. My Battles Against Goliath." An Excellent book and a must read.
1. Find out how innocent people are prosecuted every year for simple mistakes on their tax returns. [Even from putting the wrong figure on the wrong line.]
2. Ever hear of a police "compliance check" where minors go into a liquor establishment and are served liquor without being "carded"? Did you know the IRS can also go undercover to get information about you? (see page 14 of Michael's book)
3. Learn how small business owners can be betrayed by their own bookkeeper and criminally prosecuted even though they are innocent.
4. Learn what you can do to protect yourself from the IRS - the mighty goliath!
If your taxes are more complicated than a simple 1040EZ, it is always best to hire a good, reputable tax professional for consultations and tax preparation. The Tax code is extremely complicated and laws change constantly. The Tax courts are full of cases which affect every taxpayer. Find a professional who stays on top of these changes throughout the year.
LAST MINUTE FILERS - LOOK OUT!
Many taxpayers wait until April 15th and then rush to the nearest tax professional to handle their paperwork. This is dangerous.
1. All tax professionals are in a rush on April 15th and you are putting undue pressure on them to get the return completed and returned to you before midnight.
2. If there are questions about your return, some preparers will simply ignore the problem and go ahead and do the return anyway. This may cause mistakes, double deductions, etc.
3. You may be surprised at the last minute to find that you owe money! If you do not pay by the deadline, you will be charged interest. Currently, their interest rate is 5% monthly.
4. To avoid these problems, you can simply have your return completed in February or March and then wait until April 15th to mail them. If it turns out you owe money, this will give you more time to come up with the funds to pay.
5. If you prefer to ask for an extension, you can do this over the phone by calling the IRS at 1-888 - 796-1074. (Form 4868 is an automatic extension and will give you an additional four months.) This will certainly take some pressure off you and the tax professional. However, you are still required to pay the estimated taxes owed by April 15th so it certainly is not always the best approach.
6. If you are mailing in your return, particularly if you owe money or you are filing at the last minute, it is wise to send in your return by certified mail. This is your proof of filing.
Financial News Briefs
~ MCI telemarketers are telling prospective customers that LIFELINE (Christian long distance company) was taken to court for not paying the promised 10% to charities. I spoke with a representative for LIFELINE and they confirmed that this was an outright lie. MCI should be ashamed of themselves!
~ Private investigators have been known to pretend to be a creditor (such as "Sears" etc.) and call people to offer them a phone application for credit. However, they are really seeking to find out how much you earn or if you will lie! Never accept a phone call from a telemarketer. They could also be a con artist. Always ask them to send you something in the mail. However, don't give them your address. If they are really legitimate, they'll already know it. - Sharon White, CTP