Common Tax Mistakes FAQ

Why do I need to file prior year returns?

There are several reasons to file a return for a prior year. One of the most important is that the IRS could file a substitute return on your behalf. This could mean missing out on credits and deductions that you would otherwise be willing to take had you filed yourself.

Can I skip a payment on my installment agreement?

The IRS could terminate the agreement, meaning your outstanding balance would be due right away, and you could face liens or levies. In addition, your credit could suffer negative consequences, and your ability to enter into future agreements would be severely harmed.

Will my Offer in Compromise be accepted right away?

As you might imagine, the IRS is often facing staffing and budget issues. So it may take several months for your offer to be acted upon. In the meantime, you should be diligent about responding to agency requests and submitting any required documentation.

If my spouse filed our taxes with knowingly incorrect information, am I liable for the tax debt that was incurred?

You might qualify for innocent spouse relief. If your spouse, or ex-spouse, improperly took a deduction, credit or other tax item that affected your joint return, or did not report all income, then a tax attorney can help you request innocent spouse relief.

What should I say to my tax auditor?

You should be honest when asked any questions, but you do not need to volunteer information that you haven’t been asked about. Most of the time, the less said, the better. If you have a tax lawyer representing you, then your attorney can speak on your behalf.

Can I have an old audit appealed?

You can work with a tax attorney to challenge the results of an audit from a prior year. This can be done even if the attorney was not involved with the original audit. If you think a previous audit result was unwarranted, this might be an option for you.

Is it too late to report my foreign bank accounts?

The IRS has an amnesty program in place currently, so any tax penalties you could face are lessened if you are late in reporting your foreign bank accounts and balances. However, many foreign banks report this information to the IRS, so you want to make sure you tell the IRS before the government finds out from a different source.