It’s only natural that most people find the idea of dealing with the IRS to be scary prospect. When doing their taxes, most people just want to get it the whole thing over with and hope they won’t hear anything bad and maybe even get a refund. Having a healthy respect for the IRS is important, but there are times when you shouldn’t be afraid.
It is your right to take deductions and you shouldn’t hold back when you take them. You are entitled to deductions and taking a few won’t raise any flags at the IRS. But the IRS does takes notice is if there seem to be excessive deductions for the tax payers’ level of income. Even if you do take what may seem as an excessive amount of deductions, it’s still ok if you have the documentation to prove it. So just make sure and keep all your receipts.
People are afraid of being audited but they shouldn’t be. It’s not common for the IRS to conduct random audits, and the fact is that only 2% of individual returns are audited. Even if there is some discrepancy found, such as an underpayment, you’ll be notified by mail to either send in proof, or simply pay the extra taxes owed.
Sometimes people don’t know what to do if they owe money to the IRS and don’t have enough to pay. Often people who owe the IRS money and don’t have it make the mistake of ignoring the problem hoping it will go away. Ignoring the problem is not a good idea and can lead to more penalties or worse. If you don’t have enough money to pay the IRS what they say you owe, there are alternatives. The IRS will accept payments that are based on how much you can pay. There is also what is called an “Offer in Compromise” which you can file with the IRS. An offer in compromise allows you to make the IRS an offer to only pay part of what you owe and forgive the rest. For more information on any of these topics, see a tax professional.