Common IRS Tax Problems and How to Solve Them
Expert Offers Help With Income Tax Mistakes
Oct 9, 2009
Navigating the IRS can be an intimidating process. Tax returns are often complicated, and it is easy to make mistakes. However, the most common income tax mistakes are simple errors of negligence and are easy to fix.
Suite101 spoke with veteran tax preparer Michael Sanders, founder of New York City based B and M Tax Services, and discussed the most common tax problems and how to help them. The answers were much simpler than expected.
The Five Most Common Tax Problems
According to Sanders, the most common problems with IRS tax returns are simple mistakes that could easily be prevented. These mistakes are:
- Incorrect Social Security Numbers- “Many people simply don’t know their Social Security Number,” says Sanders. “With an incorrect SSN, the payer is just asking for trouble.”
- Not signing the tax return- A simple error, but a tax return can not be processed without a signature. No matter how thorough a tax preparer is, once it is out of his hands, he can not give anymore help.
- Not enclosing all W-2's- Sanders warns, “Always make sure to include all of your W-2 forms. A lot of people have multiple jobs these days or have worked for several places over the year. It’s easy to forget a W-2, but this can cause trouble. When I prepare a tax return, I usually staple the W-2 to the return so that they don‘t get misplaced.”
- Leaving out income information on tax return- “Again, when people work multiple jobs, or have money coming in from various sources, it’s easy to leave out extra sources of taxable income,” says Sanders. Better to report everything now than have trouble later.”
- Imposing numbers on tax return- Tax returns are long and monotonous. It is very easy to make typos like imposing numbers. Make sure to double check tax returns before sending them in.
How to Solve Income Tax Problems
Even if there are mistakes on an income tax return and problems develop, Sanders says that there is no reason to panic. “To fix your problems, all you have to do is send in an amended return.”
The IRS agrees, saying on its website, “If you did not report all your income or did not claim a credit, you are entitled to file an amended or corrected return using Form 1040x.” A 1040x must be received by the IRS within three years of the date of the original return filing, or within two years after paying the tax.
How to Prevent Future Tax Problems
Michael Sanders gives simple advice on how to avoid future income tax problems with the IRS. “Don’t be careless. Double check your work. Better yet, have someone else check your work. It’s easy to overlook your own mistakes, but someone else might catch it.”
Even if having taxes professionally prepared, Sanders recommends that taxpayers review the finished return. “Everyone, even preparers, make mistakes.” He then added, “Except of course, for me.”
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