IRS Myths

There are plenty of myths surrounding the IRS and it can be tough to discern what is true and what is not. It’s always smart to hire the experienced tax professionals at the Greenberg Law Group P.A to help represent your interests. Here are some of the biggest myths many people believe when it comes to taxes and the IRS.

1) If I make under a certain amount then I cannot be audited

Income levels also have no effect on your audit probability. The IRS not only sends random audits to all income levels, but they take the time to look at each and every return. No matter what you make, if they believe that you are evading taxes in any way, they will audit you.

2) The IRS has to get a Court order to levy my wages or bank account

Not true. After a Final Notice of Intent to Levy is mailed, all the IRS has to do is wait 30 days and then you can be levied.

3) I can claim my grown child/ elderly parent/ dog as a dependent

The biggest myth about claiming a dependent is that it’s easy to do. The rules for dependency exemptions are complex and you must provide a Social Security number for anyone you list as a dependent, so don’t even think about trying to claim your dog.

4) If I don’t open or pick up certified letters from the IRS nothing will happen to me

Whether you open the letters or not, the IRS will take enforced collection action (liens and levies). It’s important you open letters or you may lose important appeal rights and right to Tax Court.

5) Filing an extension gives me more time to pay

That would be nice, wouldn’t it? Too bad it’s not true. If you don’t pay the IRS what you owe by April 15, you’ll face interest and penalties. If you can’t get your taxes filed by April 15, you should estimate how much you owe and submit the payment along with your extension.

6) My house is in my spouse’s name, but the IRS filed a tax lien against it

Tax liens are filed against any property you own. Unlike, judgment liens, the IRS does not need a Court Order to file a Notice of Federal Tax Lien. The lien is addressed to wherever you live.

7) The IRS auditor’s decision is final and cannot be challenged

If you are audited and you disagree with the IRS tax auditor, you may invoke your Right of Appeal to get a review of the auditor’s decision. Believe it or not, according to the agencies own published reports, when IRS tax audits are appealed, the decisions made by IRS tax auditors is wrong more than half the time.

8) The IRS sent me an e-mail about my refund

The IRS doesn’t notify taxpayers about anything via e-mail.

9) Paying my taxes is voluntary

In the instruction book for Form 1040, the IRS states that the tax system is voluntary. That has led some people to claim that filing a tax return or paying taxes is a matter of personal choice. But according to the IRS, the term "voluntary" refers to our system of allowing taxpayers to determine how much they owe and fill out the appropriate forms, instead of receiving a bill upfront from the government. Filing a tax return isn't voluntary, and neither is paying your taxes.

10) I don’t need a tax professional

Look, the bottom line is that US Tax Law is very confusing. If you’re going at it alone, don’t be foolish. Know when it’s time to call in the big dogs. One thing a tax lawyer can do for you is to end your stress almost immediately.