Tips for Filing Tax Returns: Reduce Debt, Pay Back Taxes and Avoid IRS Problems

As the troubled economy begins its slow rebound, year-end tax planning is more important than ever, especially if you are one of the estimated 26 million Americans who needs tax relief from back taxes owed to the IRS. With the IRS enforcement budget at a record $5.5 billion, more people than ever are a potential target of the IRS and will need to know these valuable suggestions to avoid and resolve IRS problems while protecting their financial futures.

With tax season quickly approaching, Americans who owe the IRS back taxes they can't afford to pay will need to know how to swiftly and effectively reduce tax debt while also resolving financially crippling IRS liens and levies.

As the economy begins to slowly rebound, there are some 26 million Americans plagued with some type of tax problem. And with the IRS collection efforts on the rise supported by a record enforcement budget of $5.5 billion, many Americans are a potential target of the IRS and will need to know these tax tips to avoid IRS problems and protect their financial futures.

Tip for Filing Tax Returns #1: Avoid IRS Problems at All Cost
If you can't afford to pay you tax bill in this troubled economy, know that the IRS offers payment options for struggling taxpayers. You can contact the IRS directly for tax help, however, it's best to consult with a highly qualified tax relief professional first, especially if you owe $25,000 or more, have multiple years of unfiled returns or the IRS wants to audit you, who can help you increase your chances of potentially reducing what you owe and avoiding further IRS penalties.

With the IRS's enforcement budget at a record $5.5 billion, the most important tip for tax planning this year is to be prepared to file a complete and accurate income tax return to reduce your chances of an audit. This includes understanding how to reduce your tax liability including taking advantage of tax credits, as well as being smart about doing everything in your ability to reduce the chances that your return will be selected for audit, which would cost you much more in the long run.

Tip for Filing Tax Returns #2: File Your Tax Return On Time No Matter What
Even if you don't have the money to pay your tax bill, you should still file your return on time to avoid the 25% failure to file penalty right off the bat. What many people don't understand is that filing an extension just puts off the inevitable, because it's not an extension of time to pay, it's just an extension of time to file.

If you owe the IRS back taxes that you can't afford to pay come April 15th, you can file your returns and send a money order or cashiers check for $10. This does two important things: first, it takes the large 25% failure to file penalty off your shoulders; and second, it creates a computerized record at the IRS showing that you filed on time and you made a good faith effort to pay some of that money you owe. This will lessen your IRS penalties and may make your negotiations for a tax debt settlement easier later on.

Tip for Filing Tax Returns #3: If You Already Have IRS Problems, Stop Procrastinating
The worst thing you can do is ignore your tax problems. And with tax hikes planned for 2011, you need to get your own house in order now. If you have unfiled tax returns and/or you currently owe the IRS money, deal with it now before the new tax hikes kick in. Once you are liable for higher taxes, your penalties and interests will only increase with any subsequent unpaid taxes. If you have failed to file taxes in the past and feel like the IRS is breathing down your back, there is tax relief available.

Regardless of what you've heard, you have the right to file your original tax return, no matter how late. With the rising deficit and growing tax gap, collecting funds through more aggressive collection tactics by the IRS will be politically more appealing than raising taxes - so taxpayers beware! Not to mention, the IRS will not entertain any type of tax debt settlement or payment plan to settle your back taxes until you have filed all legally required tax returns

Tip for Filing Tax Returns #4: Know How to Protect the Future of Your Business
Many business owners and entrepreneurs face severe IRS problems related to delinquent payroll or sales taxes. I've seen firsthand how these tax troubles can cost entrepreneurs their businesses - especially as many business owners continue to struggle in the current economy. Since this group consists of the largest contributors to the national tax gap, they are likely targets for revenue to help reduce the federal deficit, as the IRS grows increasingly aggressive with their collection attempts.

If you've fallen behind on your current federal payroll tax deposits or owe the IRS unpaid employment taxes during a period when cash flow was tight, it's key to avoid the IRS levying your funds and taking control of your cash flow. And keep in mind that having a specialized tax relief professional in your corner to take on the IRS can make all the difference in saving your company that you've worked so hard to build.

Tip for Filing Tax Returns #5: Know Your Rights as a Taxpayer
with IRS enforcement at an all time high, we can expect the number of IRS audits to continue to rise for both individuals as well as business owners. Every taxpayer has the fundamental rights of due process, fairness and representation- even if the auditor "forgets" to explain this to you. A tax relief professional knows your rights inside and out - so be sure you have someone on your side who knows how to preserve those rights.

Additionally, recent reports have revealed that due to the number of new collection and audit cases (added to the already existing ones) the IRS finds themselves having a difficult time keeping up with an increased caseload and can no longer resolve taxpayer problems in a timely manner. So taxpayers are at a disadvantage when trying to take matters in their own hands. In these cases, taxpayers will want to consider a qualified tax relief professional to be their advocate and effectively protect their taxpayer rights. Think about it: You wouldn't go to court without a lawyer. So be prepared to know your rights as a taxpayer, or get expert help from a tax attorney or Certified Tax Resolution Specialist who can represent you in front of the IRS, or other State taxing Agency, handling all communications and correspondence, allowing you to continue on with your life.

Don't wait for IRS to come after you; we can help you resolve your IRS problems before it's too late. For more information on achieving a tax resolution for your IRS problems, visit www.taxresolution.com for a free tax relief consultation or call 888-851-5894.

Michael Rozbruch, one of the nation's leading tax experts, is a Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services (http://www.taxresolution.com/). He teams up with an expert staff of back tax attorneys, CPAs, and back tax relief professionals to help individuals and small businesses solve their IRS problems with tax liens, unfiled back taxes, offers in compromise, wage levies, back tax relief, delinquent returns, tax debt installment plans, bankruptcy and protecting an innocent spouse from unfair tax burdens.