Last Updated on Dec 24, 2019 by James W
There are few things in life more frightening than the IRS notifying you that they are starting an investigation into your financial affairs. Usually, it’s because of your failure to pay the amount of taxes they feel you owe. It could be totally unpaid taxes, partially unpaid taxes or even a matter of unreported work upon which you should have paid tax. It may be a clerical error on their part as well.
So then, what should you do when the IRS is investigating your finances? What if you’ve been penalized? Is there a way to go about removing IRS levys? Here is some of what you can do in the immediate future.
Contact a Tax Consultant Before Taking Another Step!
One of the worst things you probably can do at this point would be to contact the IRS without talking with a law firm that specializes in dealing with the Internal Revenue Service. In the same way as you are advised not to speak with the other driver’s insurance company when you are involved in an auto accident, you don’t want to be lured into saying something that could be used against you when dealing with the IRS. It is a serious matter that could have serious financial and legal consequences, so why not let an expert law team guide you for your own protection?
Get All Records and Documentation in Order
If you are under investigation by the IRS and fear the consequences, even though you honestly believe you’ve broken no laws, the best thing you can do for yourself is to pull out all the records in question. According to the IRS, there are laws requiring you to keep records for a specified amount of time. You can find those time constraints on the IRS website, but many tax advisors say that you should at least keep digital records, which can be kept unobtrusively and indefinitely on a tiny SD card.
Understand the Consequences for Falsifying Documents
In a misguided effort to try to cover errors or omissions, many people who are under investigation by the IRS try to manipulate information in an effort to ‘prove’ they paid all their taxes in a timely manner. This is the absolute worst thing you can do! Understand that there are consequences for falsifying records and the IRS can prosecute to the maximum of the law – and chances are they will! Obviously, if you are working with an attorney they will not let you misrepresent anything, but that doesn’t mean that you haven’t given your attorney falsified documents. Honesty is always the best policy and if there is a question on what you can or must report, let your attorney decide for you. That’s their field of expertise, so be guided by them.
If you feel that you are being unfairly targeted and that all your taxes are in order, the last thing you can do is try to maintain your calm. It does no one any good to worry yourself sick over it and the one thing you should know is that a certain number of people are randomly audited each and every year. Let your tax consultant do the worrying for you. That’s their job so let them do it! Now, wasn’t that easy?