The Top 50 Mistakes Practitioners Make and How To Fix Them: Dealing with the Internal Revenue Service
Introduction:
Taxation in the United States is a system of voluntary compliance. The Sixteenth Amendment of the U.S. Constitution created a system of taxation that was intended to be fair and equitable. Its purpose was to fund the government.
Since its creation in 1913, the U.S. tax system has been constantly changing. The Internal Revenue Code has grown from just a few code sections to a document consisting of thousands of pages. Taxpayers, whether they are individuals, married couples, small businesses, partnerships, corporations, or trusts are overwhelmed by the myriad of tax laws and the procedures that have been developed to assist in the proper administration of the law.
The tax law is not perfectly black and white; in many instances it is gray. Taxpayers often do not know if they should take a position that may be contrary to the law or that possibly is not even addressed in the law. Because the tax system constantly changes with the needs of society, the tax professional's job is quite challenging.
Tax professionals must not rest on their past laurels. They must keep current on new developments in the tax system, which is a challenging task. This book will assist taxpayers and tax professionals alike when they are dealing with matters before the Internal Revenue Service.
What is a tax professional?
Some individuals say that they are tax professionals because they have been preparing tax returns for 30 years. However, a tax professional is more than just a professional tax preparer. While tax preparation has been greatly simplified and improved with the advent of various tax software systems, it is still challenging. This book deals with the two other major aspects of being a tax professional: tax planning and handling tax controversy.
Why do people make mistakes when dealing with the Internal Revenue Service?
A list of reasons, which is not all-inclusive, is shown below.
Knowledge of processes. One of the IRS's responsibilities is the development of revenue procedures and methods for dealing with tax administration. While the Internal Revenue Manual is a public document, many taxpayers and even tax professionals are unaware of the guidance that it provides. Availability of time. Sometimes it is just easier to pay a tax bill than it is to research taxpayer rights under the system. Taxpayers do not want to spend time researching or, in appropriate situations, appealing IRS decisions. They may find it difficult to justify the time expenditure when they have so many other demands in their lives.
Tax law can be gray. Although there is nothing wrong with taxpayers advocating for themselves, they should ensure that they have authority for taking their positions.