One of the most frightening aspects of being an American taxpayer is the possibility that you'll face a problem with the IRS. It's little wonder that this inherent fear of the country's most powerful collection agency generally inspires strict obedience to the tax law of the land. In the interest of being proactive, there are steps you can take to reduce the likelihood of a volatile confrontation with the Internal Revenue Service.
Although there is no ironclad method for preventing a tax issue, there are some smart moves you can make that many other taxpayers don't stop to consider. Surprisingly, some of these methods of self-preservation require little effort on your part. Effective vigilance ultimately comes down to understanding the reactive nature of the IRS and conducting your affairs accordingly.
File, and File On Time
There's little dispute that one of your most fundamental duties as a taxpayer is filing your tax return. Assuming that you are W2 employee (meaning taxes are withheld from your wages by your employer), you're required to submit your tax return by April 15th each year. Your first consideration to prevent rousing the IRS' attention is to remain consistently compliant with your filing responsibilities. By getting your return in on time each year, you're demonstrating your commitment to following one of the most basic rules, which many individuals struggle to handle.
Be Honest and Accurate
Filing a timely tax return really only matters if what you're reporting is true and without error. This detail is a common point of failure for even the most well-meaning taxpayer, as mistakes in arithmetic or basic personal information are easy to overlook. Realizing this, though, allows you to take extra care in verifying the accuracy of all of your information. And it should go without saying that every portion of your tax return should be honest, to the best of your knowledge. Avoid including all of your income and claim non-existent dependents at your peril; the IRS has little tolerance for those who attempt to cheat the system.
Don't Disregard Notices
No matter how careful you are, there's always a chance that the IRS will have a question. They'll send you a notice to do just that. In some cases, you'll receive a letter merely to inform you of a change that requires no action on your part. Regardless of the reason, it's critical to open any IRS notice immediately. If you are asked to provide additional information or address a concern, you'll have a time limit to do so. Ignoring IRS correspondence will only invite additional, more aggressive, notices.
Take Any Tax Debt Seriously
In the unfortunate event that you wind up with a delinquent tax balance, work to resolve it quickly. While the IRS may allow you to pay a debt back over time, rather than all at once, this is not something you'll be immediately offered. Consider contacting a licensed tax professional who can examine your financial situation closely to determine the most affordable way to handle your liability. Remember, even if you owe the IRS, you can distinguish yourself as a conscientious taxpayer by making every effort to handle it without delay.