Thought This Was Timely… The IRS

The Truth about the IRS

Meet Janet Luhrs
Founder, Simple Living

Janet Luhrs launched Simple Living in 1992. It became an overnight sensation, “the nation’s premier newsletter on simplicity” according to the Boston Globe. Her best-selling book, The Simple Living Guide, became “the bible of the simplicity movement.” Janet has appeared on Oprah, Donahue, Peter Jennings’ World News, NPR and been quoted in the New York Times, Wall Street Journal, Redbook, and Ladies’ Home Journal, among many others.

Audits? I just got done with my taxes—I don’t even want to think about audits!

Well, my friend, I don’t like to think about audits, either. But they’re an unfortunate reality. What if you do get audited…what should you do? What’s the best way to appeal? How can you avoid penalties?

These are some tough, but important questions—especially this time of year. Fortunately, I have some answers. I interviewed two authors and IRS experts—Martin Kaplan and Dan Pilla—and got some inside secrets about the IRS that you need to know.

What You Need to Know About the IRS
(excerpt from March 2006 Simple Living)

The IRS isn’t as strong as you think it is. They like to portray that image, of course—but you have more clout than you think you do. Here are the facts you need to know to protect your hard-earned money:

When It Comes to Decisions—the IRS Is Usually Wrong!

Mr. Pilla’s statistics show that the IRS is wrong 60–90 percent of the time. IRS decisions are not final. Every decision they make is subject to review and you have the right to appeal.

It is a very simple, inexpensive process to appeal an IRS decision. All you need is a protest letter that gets your case in the hands of officials who are responsible to negotiate settlements with taxpayers. As a consequence, you will win your case most of the time when you use your appeal rights.

How to Avoid Penalties if the IRS Is Right

The IRS issues approximately 30 million penalty assessments each year, out of a total 132 million tax returns filed.

But every single penalty provision in the tax code has a good faith or reasonable cause provision. That means if you acted in good faith and based on reasonable cause (i.e., not out of an attempt to mislead the IRS), the penalties do not apply. The burden of proof is on the taxpayer to show that he or she acted in good faith.

The Right Way to Handle an Assessment

The IRS makes audit assessments by computer on a regular basis. They’ll look at a tax return and send a letter asking for a check. Many people get these letters and automatically send the check, while others call the IRS to ask questions. The key is not to call and ask questions, but to request an abatement of the tax. If you ask for an abatement, they must cancel your tax liability. If you ask a lot of questions, your appeal time of 60 days may very well run out.

About Ask Marion

I am a babyboomer and empty nester who savors every moment of my past and believes that it is the responsibility of each of us in my generation and Americans in general to make sure that America is as good or even a better place for future generations as it was for us. So far... we haven't done very well!! Favorite Quotes: "The first 50 years are to build and acquire; the second 50 are to leave your legacy"; "Do something that scares you every day!"; "The journey in between what you once were and who you are becoming is where the dance of life really takes place". At age 62 I find myself fighting inoperable uterine Cancer and thanks to the man upstairs and the prayers from so many people including many of my readers from AskMarion and JustOneMorePet... I'm beating it. After losing our business because of the economy and factors related to the re-election of President Obama in 2012 followed by 16-mos of job hunting, my architect-trained husband is working as a trucker and has only been home approximately 5-days a month since I was diagnosed, which has made everything more difficult and often lonely... plus funds are tight. Our family medical deductible is 12K per year for two of us; thank you ObamaCare. But thanks to donations from so many of you, we are making ends meet as I go through treatment while taking care of my father-in-law who is suffering from late stage Alzheimer's and my mother-in-law who suffers from RA and onset dementia as well as hearing loss, for which there are no caretaker funds, as I continue the fight here online to inform and help restore our amazing country. And finally I need to thank a core group of family, friends, and readers... all at a distance, who check in with me regularly. Plus, I must thank my furkids who have not left my side through this fight. You can see them at JustOneMorePet.
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