Defend Yourself! by Mark J. Green

Author:Mark J. Green
Language: eng
Format: epub
Publisher: HarperCollins

FILING: THE IDES OF APRIL

CASE STUDY

On March 15, 1938, President Franklin Delano Roosevelt sent his incomplete tax return and a check for $15,000 to the Commissioner of the IRS with a cover letter that began, “My dear Commissioner . . . I am wholly unable to figure out the amount of the tax” owed on his 1937 income. After explaining his confusion, the president continued: “As this is a problem in higher mathematics, may I ask that the Bureau let me know the amount of the balance due? The payment of $15,000 doubtless represents a good deal more than half what the eventual tax will prove to be.” Obviously, few of us have such a powerful ally at the IRS. But if you know your rights and the resources offered by the IRS, you just might feel as if you’re getting FDR’s special treatment. For example, there are several national volunteer-driven filing programs where well-trained volunteers will file your taxes for free if you are a senior or a low-income taxpayer.

Jane Smith, a Michigan taxpayer, wife, and mother of a middle-aged disabled son, had always filled out her own taxes until the year her husband became ill and was laid off. She was afraid they owed money—money that they couldn’t afford to pay. She took her tax information to an AARP Tax-Aide location in a nearby community center, where a volunteer tax preparer found that Ms. Smith hadn’t claimed all her credits—particularly for her dependent son—and actually was due a substantial refund. “They were in a really bad way,” said the volunteer. “That money meant a lot to them.” Realizing that Mrs. Smith was likely due money from other returns, two volunteers offered to amend as many prior returns as the IRS allowed. In the end, Mrs. Smith’s total refund was over $5,000.

It is practically impossible to say anything new about filing taxes—every joke has been made, every complaint voiced, and every opinion stated. Perhaps the only aspect of taxation that isn’t overplayed is the truth—that is, the actual details of paying your taxes and defending yourself against mistaken or illegal IRS rulings. Americans who are afraid of finding an IRS agent at their front door don’t realize that there are things they can do to avoid that knock from the very start of our filing process.

While the first rule of filing is remembering that you are legally responsible for the truth and accuracy of your filing no matter who penciled in the numbers, you can protect yourself by carefully weighing all of your filing options from the start—particularly when deciding whether to pay Uncle Sam on your own or with the help of a tax preparer. Typically, self-prepared returns are more likely to contain errors; in 2002, about 9 percent of self-prepared forms had errors compared to about 3 percent of paid-preparer returns.

Going It Alone Despite the headache IRS forms can cause, millions of Americans still break out the proverbial shoebox of receipts each year and start penciling in their taxes.

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