10 Things the IRS Won't Tell You

This month's SmartMoney magazine includes a fascinating article called "10 Things the IRS Won't Tell You." As April 15 approaches, it's worth scanning those lessons to make sure you're not next in line for an unhappy tax surprise:

  1. Like it or not, you may need help with your taxes. Tax laws have grown so complicated that 80% of Americans use software or a paid preparer to file their returns.
  2. You don't have to be rich to get audited. Audit rates have doubled since 2000, and the IRS is looking harder at items like big charitable contributions.
  3. Fear is often our best weapon. The mere threat of an audit is enough to scare millions into leaving legitimate deductions on the table. (It's our job to make sure that doesn't happen to you!)
  4. The AMT is our ATM. The AMT was first passed 40 years ago to stop "the rich" from skating by without paying their fair share of tax. But since then, it has grown to hit over 4 million taxpayers.
  5. Just because we billed you doesn't mean you owe us money. The IRS sends out thousands of "CP2000" notices annually. But the vast majority of those "correspondence audits" merely call for clarification, not extra tax.
  6. If you don't pay, we'll sic a collection agency on you. The IRS has begun using private collection agencies to collect federal taxes -- and those private agencies can cost you the opportunity to settle your tax debt for less than the full amount due.
  7. Want to go green? We'll help you pay. The IRS offers several breaks to encourage you to invest in energy efficiency.
  8. April 15 isn't necessarily a hard deadline. Your actual tax bill is due April 15. But you can claim an automatic extension for six more months to file your return. And if the IRS owes you money, there's no penalty for missing that deadline!
  9. We may be a government agency, but that doesn't mean your data's safe. The Treasury Inspector General for Tax Administration, an independent oversight group, reports that the IRS has deployed new information systems despite known security flaws.
  10. We may still have your refund. More than 100,000 taxpayers per year never get their refunds, mainly due to bad mailing addresses or direct-deposit information.

Click here to read the entire article.

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