If your identity has been compromised with the Internal Revenue…
Let’s face it, my job is to file your taxes accurately, to advise you on how to be compliant, but some of you just don’t want to follow my directions.
If you want the IRS to notice you, and incur fines and penalties that are quite expensive, change your federal withholding to exempt and then forget to file a tax return or two. It will typically take two years before the IRS will reach out – but they will. If you ignore their first few letters, the IRS will prepare a return on your behalf (might not list all the deductions that you could take) and add failure to file penalties, failure to pay penalties and interest. If you continue to ignore the IRS, they can take the money in your bank accounts and more. Truly, this is a great way to double or triple your taxes – making you twice (or thrice) the patriot of your neighbors! Once they file liens, your credit score will plunge too! Doesn’t this sound like fun? Payment plans will strain the family budget for years.
Have an audit with the IRS? Sorry. If you want some extra attention from the IRS, just lose all of your receipts. Watch all of those deductions disappear. Another great way to double up your taxes, especially if you are a small business.
Now that you know what not to do, let’s take steps to ensure that you are compliant and paying the least amount of taxes legally possible. Keep those receipts, file the correct number of exemptions and ALWAYS file your tax return timely.