Tax Tips & IRS Stories

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Published: 12 Apr, 2012
2 min read

IRS

Tax season is upon us again. Here are a few tips to perhaps make things easier, plus a few things about the IRS that may surprise you.

File your federal taxes online for free with Internal Revenue Service e-file.

If you make $57,000 or less, the IRS provides free software from tax software companies to help you prepare your taxes. You may be able to file your state taxes too.  This option does most of the work for you. If you have no deductions and your income was on a W-2, then you may not even need a tax preparer and can do it yourself.

If you make more than $57,000 you can prepare your return online, including filing as many forms as needed. This option assumes you know what you are doing!

You can e-file using commercial tax software. The return is sent encrypted and secure and you get your refund faster.  This is also true if you use a paid tax preparer who can e-file.

File non-resident returns with zero income in states you used to live in.

There are a few horror stories floating around about state tax boards going after assumed tax revenue from people who have moved out of state and have no business interests there. While these stories may be exaggerated, the best way to avoid this problem is to file a non-resident return in that state with zero income. Filing a return starts the clock running and after a certain period, the state can make no claim on earnings. If you don’t file, the clock never starts and the state can make a claim at any time.

So the dog ate the tax receipts you had in a cardboard box and you’re panicked?

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You can always file a six-month extension. You must pay part or all of what you owe, and you can e-file.

Even though this is the time of year when everyone hates the IRS, you may be surprised to learn that IRS agents themselves, as part of their job requirements, have full audits of their own tax returns done each year by an IRS agent in a different office who doesn’t know them. Most audits are line item audits with the taxpayer being asked to provide documentation for a few items. By contrast, a full audit means they can ask for documentation on anything, and that’s what IRS agents get every year.

You should also know that the IRS takes taxpayer confidentiality extremely seriously. Access to taxpayer information is tightly monitored and strictly controlled. Unauthorized access can and does lead to be fired and even criminal prosecutions. These investigations are handled by the Treasury Inspector General for Tax Administration, which is independent of the IRS and has no sense of humor.

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