Mistakes Taxpayers Make
- Not filing
- Delaying filing via extensions unless instructed to by a tax professional
These two errors delay the start of the assessment and collection statutes of limitations. In addition, it lengthens the time it will take to discharge amounts claimed by the IRS in bankruptcy.
- Not using a tax professional
- Waiting until a crisis comes up such as a wage or bank levy before getting professional help.
These errors actually result from the IRS public relations campaign to deal directly with taxpayers without the taxpayer exercising the right to professional representation.
- Using the IRS as a bank
If you delay filing or paying employment taxes, you are taking risks far above the potential payback. The IRS will penalize you, anyone who signs checks, and anyone in a decision making capacity in your firm. DO NOT DO THIS.
- Operating a business as a sole proprietor or partnership
You, and probably your spouse have unlimited PERSONAL liability for all employment taxes, interest and penalties, and the matching portion. If you operate as a CORPORATION, your personal liability is much more limited.
- Trusting anyone from the IRS
DON'T BELIEVE ANYTHING ANYONE FROM THE IRS SAYS UNTIL YOU CHECK IT OUT WITH A PROFESSIONAL. Practically everything the IRS says is misleading or an outright misstatement. IT BEGINS WHEN THEY SAY THEIR OWN NAME WHICH IS ALMOST ALWAYS A LIE. The IRS employee will tell you anything they want then deny they said it and demand you prove they said it. They will put things in your file that you did not say or do. For an example of the deception see this page on Collection Waiver.
- Not reading the information sent to you by the IRS
The IRS gets around the law by mailing lots of paper to the taxpayer which the taxpayer rarely reads. So read it. The IRS is obliged to explain your rights to you. This is how they get around it.