The Art of Tax Compliance: 12 Powerful Rules to Keep You Away From the IRS
Hey, my friends!
I want to help you stay your ass out of the IRS office. That’s my job. My mission is to help you secure the life you love and leave what you don’t spend to those you love. We are going to pay our fair share of taxes, however, we won’t just be out here throwing money to the IRS all Willie Nillie.
Paying taxes is good, it means you made a profit and you are a responsible citizen, who takes care of your community and environment. However, getting the “Uncle Sam shakedown” is neither fun nor smart.
Let’s delve into 12 vital tax rules that will help you maintain good standing with the IRS and protect your financial interests:
- Pay Small Tax Bills Promptly: While it might be tempting to dispute minor discrepancies, paying small tax bills promptly is a wise move. This can prevent audits and disputes from escalating and consuming your valuable time.
- Understand the Importance of Forms 1099: Forms 1099 are not to be taken lightly. They link income to your Social Security Number (SSN) or Employer Identification Number (EIN). Ensure the accuracy of these forms and file them diligently with the IRS.
- Be Cautious with Foreign Accounts: If you possess foreign bank accounts with balances exceeding $10,000, remember the FBAR (Foreign Bank Account Report). Failing to file it can lead to IRS scrutiny and its associated headaches.
- Recognize That Everything is Taxable: Here’s a golden rule – the IRS taxes all income from any source. Whether it’s a lottery windfall, gambling winnings, or drug money, it’s all taxable.
- Respond to IRS Letters: Never underestimate the importance of timely communication. Always respond to IRS letters promptly, unless explicitly instructed otherwise. Ignoring IRS correspondence can lead to complications you’d rather avoid.
- Stay Silent When IRS Visits: Just like talking to the cops, hush. If the IRS pays an unexpected visit to your home or business, remember that you have rights. Politely but firmly inform them that you’ll have your attorney or enrolled agent get in touch with them. Silence can be your ally in such situations.
- Be Cautious with Amended Returns: While amended returns are sometimes necessary, they can also raise red flags, particularly when requesting refunds. Approach amended returns with caution and only make changes when absolutely required.
- File Returns Even If You Can’t Pay: Financial difficulties should not deter you from filing your taxes on time. File your returns promptly, and if you can’t pay the full amount owed, work with the IRS on a payment plan. Late filing often incurs harsher penalties.
- Retain Records for Seven Years: Maintain meticulous records of your financial transactions for at least seven years. Additionally, consider keeping copies of your tax returns indefinitely. Proper record-keeping is essential for compliance with IRS requirements.
- Avoid Over-Explaining: Keep your tax returns concise and to the point. Provide explanations or additional documents only if specifically requested by the IRS. Unnecessary elaboration can invite unwanted scrutiny.
- Handle Large Refunds Prudently: When you find yourself in the fortunate position of receiving a substantial tax refund, think strategically. Applying this windfall to next year’s tax payments can reduce your profile and the chances of an audit.
- Seek Professional Advice: Handling tax matters independently can be fraught with risks. When faced with audits, disputes, or complex tax issues, don’t hesitate to seek the services of an enrolled agent or tax professional. Their expertise can make all the difference.
By following these 12 essential tax rules, you not only safeguard your standing with the IRS but also ensure you’re protecting your funds! Remember, professional guidance is a valuable resource, so don’t hesitate to seek expert advice when navigating the intricacies of tax compliance.
Mastering these rules will help you save time, money, and stay your ass out the IRS office.
Stay empowered,
LA🌻🖤
Chief Strategist
