The IRS could be classified as one of the most
powerful organizations in the U.S. Considering that that the IRS is
solely responsible for collecting Federal taxes and imposing penalties
for late, understated, or evasive filings, the IRS poses one of the
largest financial threats to many individuals and business owners. To
sum it up, the IRS has unique information resources, legal standing, and
roles as a law enforcement agency. On top of that, the IRS also acts as
a legislative-originating authority with a large amount of freedom to
make mistakes with out consequences (no one can penalize the IRS for
incorrect tax accusations).
So what can
we do to minimize the IRS?s over-inflated accumulation of power and
protect ourselves from its potential for financial wrath? Unfortunately,
if there were a concrete answer for that, the IRS wouldn?t be the
intimidating and widely feared agency it is today.
Since
the IRS uses what filers provide (along with other miscellaneous
resources) to help determine the accuracy of accused filings, our
defense is greatly reduced. That?s the IRS?s whole idea! There is one
thing we can do, each day, to better prepare ourselves for possible tax
evasion accusations?keep records.
Quite
possibly, our best defense against audits and false evasion accusations
is to keep accurate, detailed records of cash flow, payments, earnings
and other financial motions. Depending on your profession and your
position within it, your specific approach could be extensive and time consuming.
A
meeting with your financial advisor or accountant is a great place to
start to find advice on what financial records and statements are the
best to focus on to keep up your guard. Generally speaking, the greater
volume of records you keep (and their accuracy), the better your chances
are for surviving an all-out IRS battle.
Friday, February 12, 2016
