Paying taxes is no one’s favorite activity, and we all hate writing out that check to Uncle Sam. But failing to get your taxes done correctly can be even costlier. Even the most common tax return mistakes can end up costing taxpayer’s big bucks. Here are 8 tax mistakes we see our clients make before hiring us that ordinarily cost them significant time, money, and stress and can put their liberty, continuing ability to earn a living, “career,” and net worth at risk.
Foreign tax issues, such as receiving a foreign inheritance and not reporting it because of fear of a nonexistent estate tax, or having a history of offshore income tax evasion and the associated undisclosed foreign accounts
Misunderstanding confidentiality, either by telling the buyer of your business about your second set of books and expecting your confidentiality agreement to protect you, or by involving a company employee in your tax fraud and expecting them to keep your secrets
Poor organization, such as not keeping sufficient books and records to substantiate an audit, failing to engage in tax planning, or overly aggressive (or even fraudulent) tax planning (like using shady tax shelters)
To err is human, but the IRS and state taxing authorities are not in the forgiveness business. Tax time isn’t the right time to make errors, or commit income tax evasion, because these actions can be very expensive and life-altering if followed by an audit or criminal tax prosecution. Contact the Tax Lawyers, CPAs and EAs at the Tax Law Offices of David W. Klasing to learn how to avoid these mistakes, and to get help if you’ve already made one of them. The risk of criminal prosecution for most forms of tax fraud can be eliminated if we approach the taxing authority before they approach you!