Top Tax Defenders Reveals the Top Reasons Why the IRS Might Go After You

1. July 14, 2017 Top Tax Defenders Reveals the Top Reasons Why the IRS Might Go After You You’ve seen it in movies before: some big shot billionaire falls from grace after the Internal Revenue Service (IRS) comes after them. Though it seems like the IRS only pursues high value cases in movies, they are quite tenacious with everybody who fails to comply with the existing tax laws. There might even come a time when they are seemingly on your heels. Page | 1

2. Simple Facts about Tax It doesn’t matter to them whether you are a big corporation, a government employee, a celebrity, or an ordinary private citizen as long as you pay the correct amount of tax. Despite the fact that you don’t have to pay state income taxes in Texas, you are still expected to pay sales, property, and gas taxes. In Houston, tax defenders noted that ordinary citizens will need to pay around 6.75% in sales tax, approximately 2.3% on property tax, and 20 cents per gallon on either gas or diesel. Federal taxes still apply. There are times when you have unconsciously done some things to be flagged down by the IRS. It is also not unheard of for the IRS to conduct random audits to check if all of your numbers are in order. An audit is also conducted to investigate any suspicious activities that can potentially widen the tax gap in your favor. Computation and Clerical Errors It might be an honest-to-goodness mistake. However, a simple apology is not going to cut it with the IRS. If you don’t want to be hounded with exhausting audits, then you need to make sure that everything you file is free from any math errors. The IRS defines math error as anything that involves a mistake in computation on your return. It is also defined as an incorrect or selective use of information from pertinent documents like tax tables, forms, statements, schedules, etc. However, corrections to withholding tax payments and any tax increase/decrease are not considered math errors provided that you give substantiated documents that prove the corrections within a 60- day abatement period. Failing to Understand How Tax Collection Works Just because Texas is a no-income-tax state doesn’t mean you are truly free from paying income taxes. If you’re from another state who happens to work in Houston, you still need to file your income taxes in your home state, regardless if it was earned in Texas. Page | 2

3. Similarly, if you are a resident of Houston but happen to work in a state where income taxes is a requirement, then you must file a non-resident tax return. The only exception to this rule is if you happen to be working in a reciprocal state. However, you would still need to file an exemption form with your employer. Declaring Too Many Deductibles While it’s always admirable to provide donations to charitable institutions, too much will actually raise a red flag with the IRS. If you have the proper documentation, then there’s no need to worry. Still, if you are claiming that you have given almost a third of your income to charitable institutions, then you are increasing the likelihood of an IRS audit. As much as possible, hire an expert to help you prepare and guarantee the correctness of your tax returns. It will save you from a lot of trouble from filing a questionable return and having to explain yourself before the auditors of the IRS. About Nexus Tax Advisors, LLC: You never have to worry about due diligence in the preparation of your tax returns with Nexus Tax Advisors, LLC at your service. We are a full-service tax firm that aims to help you solve all of your tax woes and issues. We have a team of tax attorneys that offer personalized tax services to suit your needs. Sources: 7 State Income Tax Myths, TheBalance.com 2017 Tax Season Refund Frequently Asked Questions, IRS.gov Page | 3