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St. Louis Tax Law Blog

Coping with tax audits in Missouri

For many in Missouri and across the country, filing taxes is a time-consuming task that is filled with complications. Often, there is a concern that a simple mistake will lead to an audit and, potentially, criminal charges. For many, the risk of audits is daunting, and many people who must undergo them are unfamiliar with the process.

An audit is a formal examination of tax returns conducted by the IRS to uncover inaccurate information or discover fraud. An audit can occur as a result of a random or intentional selection. A random audit is typically a simple matter of taking a closer look at a filing. A person will receive a letter in the mail, indicating the IRA's intent to conduct an audit.

Did you know you can sue the IRS?

What could be worse than owing taxes to the IRS? Being audited by the IRS. After completing the audit, there is a good chance that the agency will hand you a tax bill. At this point, you may decide to agree with the agency's findings, but if you don't, you do have an option.

If you decide to dispute the findings, the IRS will send you a 90-day letter called a "notice of deficiency" that outlines the changes to your tax returns that the agency wants to make. At this point, you have 90 days to file a dispute in the Tax Court. If you miss this deadline, the changes suggested by the IRS take effect since you effectively agreed to its findings.

Are you responsible if your spouse cheated on taxes?

You have probably heard the warning many times in your adult life not to sign something you have not read. Nevertheless, most people will admit that they do so frequently. Someone pushes a paper across the desk or counter, gives a synopsis of the contents and points to the line where you should sign.

If you do this so easily with people you barely know, chances are you don't think twice when your spouse asks you to sign something. This may have happened recently during tax time, and you may recall several years when your spouse asked you to sign tax forms you didn't bother to review. Unfortunately, when a spouse signs a tax return, the Internal Revenue Service assumes that spouse has full knowledge of what the forms contain. If your spouse cheats on your taxes, the IRS may hold you liable.

The tax relief option the IRS doesn't advertise

If you have student loans like so many other Missouri residents do, then you are probably familiar with the term "deferment," which allows you to postpone your loan payments for a specified period. Did you know that the IRS has a similar option? Of course, the criteria for receiving a deferral from paying your taxes are much more stringent than it is for your student loans.

You will need to show that you have no money left, or very little money left, after you pay for your necessities such as food, rent and utilities. This requires you to provide a significant amount of documentation regarding your financial situation to the IRS. You will also need to file all of your tax returns and fill out the required forms before you can proceed.

Responding to tax evasion allegations in Missouri

April 15 is often a dreaded date for many individuals and businesses in Missouri and across the country as that is the day that taxes typically must be filed. Though most people enjoy the things that taxes fund -- such as public libraries and well-maintained roadways -- few people enjoy parting with their hard-earned money. Despite this, most people do not attempt tax evasion.

Americans are required to fill out tax forms every year. Through these forms, they report the size of their families, the amount of money they earned and their expenses. Though this may seem relatively straightforward, the process can be complicated. After factoring in the total income and any deductions, an adjusted gross income is determined, then any allowable credits -- such as those obtained by investing in the energy efficiency of a home -- are added back.

Can you lessen the likelihood of facing a tax audit?

With tax season rapidly coming to a close, you may still have many worries regarding your personal taxes. Any time you have to deal with the Internal Revenue Service, you may feel a twinge of anxiety, even if you feel that you have done nothing wrong. In fact, many people commonly fear that they will face a tax audit.

If you also share this fear, you may wonder what you could do to lessen the likelihood of getting a notice of an audit. Fortunately, you can take certain steps to help avoid such a situation. Additionally, even if the IRS does conduct an audit, you do not have to deal with the process alone.

Diner owner accused of tax evasion

Anyone in Missouri who has completed -- or attempted to complete -- their own taxes likely knows of the complexity associated with the process. Unfortunately, it is easy to make mistakes. Despite knowing how difficult filing taxes can be, prosecutors may be quick to assume that what is exactly a mistake is an intentional oversight, resulting in accusations of tax evasion.

A business owner in another state is facing such allegations. Officials claim that the accusations involve a 58-year-old woman who owns a restaurant called Donna's Restaurant. The eatery is said to be known for its family friendly atmosphere and was originally opened by the woman's father.

Are you a small business owner who can't afford your tax bill?

Federal taxes are due on April 17 this year, but those extra two days won't help small business owners fix a looming tax bill. If you haven't set aside enough to pay your business's income taxes, what can you do?

Don't panic. Realize that you're not the first business owner to make this mistake. There are reliable ways of dealing with the problem. Here are a few good tips.

Failure to pay employee payroll taxes

As the owner of a Missouri business, one of the most burdensome tasks you must oversee is the paying of taxes to the federal government. You may deal with sales tax, property tax and income tax, as well as taxes that are specific to your product or service. However, the IRS may be most concerned about receiving your share of payroll tax.

Since your company deducts these funds from your employees' paychecks, the IRS considers failure to turn over those payments among those most egregious of all tax crimes. The penalties for failing to pay federal payroll taxes can be quite severe unless you can prove you were not responsible for the payments or the mistake.

It may not feel like it, but taxpayers do have rights

Are you among the many Missouri residents who feel as though the IRS holds all the cards? No one likes paying taxes, but most everyone (perhaps resentfully) understands that it's a necessary evil. The problem is that it feels as though the IRS has unlimited power to wreak havoc on your life if you can't pay your tax bill.

The IRS has the right to put a lien on your property, garnish your bank accounts and even come into your home and seize property. What about you, though? Don't you have any rights as a taxpayer?

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