Atlanta Tax Law Blog

Some Georgia taxpayers may be concerned about getting audited by the Internal Revenue Service. Much of the concern could be due to the significant amount of misinformation that circulates about tax audits.

Taxpayers should know that audits are not very common. In fact, less than 1 percent of all tax returns that are submitted every year undergo an audit. For people who earn an average income, the likelihood that they will be audited is even lower.

A warning has been issued by the Internal Revenue Service that applies to taxpayers residing in Georgia and around the country. In January 2018, the IRS implemented the Fixing America's Surface Transportation (FAST) Act which, among other things, provides that people must pay their back taxes if they plan to travel abroad. Otherwise, they may experience issues renewing their passports or obtaining new ones.

According to the regulation, the IRS must let State Department officials know the identities of delinquent taxpayers who owe at least $52,000 in back taxes. In accordance with this law, the State Department must deny passport applications and passport renewals submitted by them. In addition, these issues may cause delinquent taxpayers to have their passports revoked.

The federal tax overhaul that went into law in 2017 has exposed many taxpayers in Georgia and around the country to unexpected income tax bills. According to the Government Accounting Office, roughly 3 million more people than last year will have failed to withhold sufficient income taxes from their paychecks to avoid owing when they file their 2018 federal tax returns. One tax accountant explained that entitlements to withholding allowances that people had grown to expect were reduced. This translated into people not having enough money taken out of their paychecks. The loss of some itemized deductions have also produced higher tax liabilities.

The elimination of itemized deductions for state and local income, sales and real estate taxes above $10,000 formed a primary source of tax liability resulting from the 2017 Tax Cuts and Jobs Act. Another tax accountant noted that people who live in regions with high taxes have lost their ability to deduct some of those expenses from their federal taxable income.

Most taxpayers in Georgia dread receiving a contact from the Internal Revenue Service. Fears of an audit, a tax levy or asset seizure come to mind. Unfortunately, there are unscrupulous individuals in the world who choose to prey upon these fears. Fake contacts through telephone calls, emails and text messages have become more common.

Fake IRS scams are becoming more common in recent years, and the SMS is the latest method of initiating the scam. Using a text message that looks like it came from the IRS is increasingly popular among scammers. This is because people respond to a higher percentage of SMS messages than emails. After the message is sent, the scammer may then attempt to extort money under the guise of a fake tax liability.