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September 2014 Archives

The possible consequences of not filing a tax return

Many Georgia residents are likely concerned about the fiscal state of the nation. Mounting deficits and rising government spending are legitimate causes of concern, but a September 2014 U.S. Tax Court decision may serve as a reminder that not filing a tax return as a form of protest may have unfortunate consequences. When an individual fails to file a tax return, the IRS creates a return on their behalf using the wages and payment records in its possession. However, the IRS may not always compile a return in the way most advantageous to the taxpayer.

What is an IRS levy?

An IRS levy is action taken by the federal government to seize property, bank accounts and wages, among other assets, legally in order to satisfy a taxpayer's tax liability. If the taxpayer has not paid or arranged with the IRS to pay a tax burden, the government could initiate a levy against all properties or interest in properties held by the taxpayer. In some cases, the IRS can even seize a tax refund due to the taxpayer from the state of Georgia.

What happens during an IRS audit?

A Georgia tax return may be selected for an audit based on a number of criteria. While some are selected randomly for examination, others are chosen based on the information provided in the associated documentation. In some cases, a return is selected for audit because of transactions conducted with others who have had their returns audited. Those who have had their returns selected for audit will be notified either by phone or by mail. In either case, a letter will be sent to confirm the audit.

Avoiding a tax lien in Georgia

Comedian Chris Tucker recently settled a tax case with the IRS for more than $14 million. A representative for Tucker said that it was due to poor management and business practices. While mistakes may be made by anyone, a taxpayer generally has several chances to rectify those mistakes before the IRS takes serious action.

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