The Internal Revenue Service uses numerous notices to contact taxpayers if the agency believes something is amiss with a taxpayer's return or tax balance. As a result, if New York residents receive a notice from the IRS, they may immediately feel a bit anxious and possibly confused about what the notice means. For instance, if a person receives a CP516 notice, it means he or she may have a delinquent tax return.
Receiving a notice from the IRS is something that many people feel nervous about. It can certainly be difficult for any New York resident to learn that he or she is facing an audit. Unfortunately, it is all too easy to make errors when filing taxes, and these mistakes could easily raise red flags with the government agency.
When filing their taxes, most married couples in New York choose to file jointly. This common practice can offer benefits when it comes to utilizing credits and deductions available for specific couples. However, if one spouse or a former spouse omits information or improperly claims deductions on a joint return, the IRS may flag a problem with the return. Often, this means that the couple is liable for the taxes, interest and penalties that result. Fortunately, some parties may qualify for innocent spouse relief.
The issues that can come about relating to tax matters are, unfortunately, numerous. Some New York residents may simply want to pass up the task of filing their tax paperwork altogether, but that is not necessarily a wise choice. The IRS can still attempt to collect taxes even if a person does not file a tax return, which is less than ideal.
Filing taxes may seem like simply filling in certain information on the correct forms, but the chance exists for numerous issues to arise during filing. In some cases, a New York resident could face an audit if the IRS believes that something in that individual's information is incorrect or if some other problem arises. One issue in particular that could lead to a closer look is if a child is claimed as a dependent by more than one person.
Taxes are complicated to address. Of course, most New York residents and those across the country want to do what they can to minimize the amount of taxes they owe. However, it is important to remember that certain measures to reduce taxes, like tax avoidance, are legal, and some actions, like tax evasion, are not.
Doing one's taxes is not always an easy process. Even if New York residents use online resources or tax professionals to file their documents, they may still end up with questions from the IRS. In some cases, tax controversies can result, and individuals may need to handle discrepancies.
Dealing with taxes is annoying at best and immensely complicated at worst. For some New York residents, their yearly tax journey may not end with simply filing their returns and receiving a refund or having a bit more taxes to pay. In some cases, the Internal Revenue Service could suspect an issue, and some taxpayers may have to handle tax controversies.
Tax season is typically not one that individuals look forward to. Though possibly receiving a refund can make having to go through the often tedious filing process worth it, it can still be a stressful time, especially if the IRS decides to conduct an audit. Tax controversies can cause anyone to panic, but there are ways New York residents could help themselves lessen the likelihood of an audit.
A previous post on this blog talked about how an iconic store in New York City was facing allegations that it evaded collecting and remitting the state's sales taxes for years. The store is now staring down an over $7 million delinquent tax bill that is now pending in the state's courts.