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When it comes to the Internal Revenue Service, they do NOT have a presumption of innocence. Yes, they want to help you, help you pay your correct and proper tax.
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Preparing your tax return starts way before you “Do It Yourselfers” open your tax software. It begins way before you make your appointment with your trusted tax adviser. It begins every time you make a bank deposit and with every check you write, or with every debit you authorize. If you have been careful in keeping track of your numbers. you stand a better chance of coming out of an audit “clean.” If you have been careless in keeping your receipts, you stand a better chance of having to pay the tax man.
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I was in the Audit Division. We examined tax returns and taxpayer documentation. PAPERWORK is they key to saving your backside. When you spend your money on something that is deductible, you want to keep that receipt. It will show what you bought, when you bought it, who you bought it from and how much you paid. It will not have ‘TAX DEDUCTIBLE” stamped all over it. The seller does not know if what they sold you is a tax deduction for you. However, if you don’t keep the paperwork and you deduct that item on your tax return, the IRS will take a bite out your wallet again when you are audited and cannot present the paperwork.
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Elliott Ness, the great “Untouchable” was an IRS Revenue Agent. He was one of the first to say “Show Me the Money.” Okay, not in those exact words. He did, however, follow “the paper trail.” Al Capone, the famous Chicago gangster, did not go to jail for selling dope or making bathtub gin. He did not go to jail for running illegal gambling rooms or any of the other criminal activity he was known for. He went to jail for committing another crime – tax evasion.
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It is okay to arrange your tax affairs to pay your lowest legal tax. Bullet Proof Your Taxes is all about helping you save taxes. It is okay to legally avoid paying tax by raking full advantage of deductions and credits. It is NOT okay to evade tax. When you cheat on your taxes, you will pay more than tax. You will also pay interest and penalties or even go to jail.
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My job at the IRS was in the Examination Division. I do have colleagues that worked in the Collection Division, they were called Revenue Officers. It was their job to gather your financial information and collect the tax that you owed after I finished the examination and made my determination.
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If you need help with a collection matter today, I will recommend a specialist retired from the IRS collection side. They will know how best to help you. Sometimes it is not what you know, but who you know.