For self-employed taxpayers whose taxes are not automatically deducted by their employer, it is especially important that they stay on top of their tax returns to avoid IRS penalties. Income from interest and proceeds due to real estate and stock sales are considered taxable income. If you receive money from your real estate or stock sales and do not report these revenues as taxable income, you are inviting yourself an IRS audit that could result in severe IRS penalties.

CCH (http://tax.cchgroup.com) reports:

Individual Received but Failed to Report Taxable Income; Penalties Imposed

An individual was liable for income and self-employment tax deficiencies for several tax years because amounts of compensation, interest and proceeds from real estate and stock sales that he conceded that he received constituted taxable income. The individual only provided frivolous tax-protestor arguments and self-prepared Forms 1099-MISC showing zero compensation as support for his assertion that the amounts were not taxable income. Additions to tax for failure to timely file federal income tax returns and failure to make required estimated tax payments were sustained because the taxpayer failed to assign error to the penalties in his Tax Court petition and, thus, was deemed to have conceded that the penalties were appropriate. Penalties for delay of proceedings were imposed because, despite warnings from the court and the IRS, the individual continued to delay the proceedings with frivolous tax-protestor arguments.

If the IRS contacts you for tax deficiencies, it is unwise to ignore the notices and believe that it will sort itself out. The more you wait to get in touch with the IRS, the more severe your IRS penalties will be. When you’re unsure of how to confront the IRS, the best thing to do is to seek professional tax help. If you bring tax experts onto your team to fight against the IRS, you will have much more sound knowledge and information in your arsenal.

At Tax Resolution Services, we will take over all communication with the IRS on behalf of our clients so that they do not have to speak with the IRS directly ever again. If you dread communicating with the IRS and fear that you may inadvertently say something incriminating, contact us at at 866-477-7762 or visit our website: www.taxresolution.com

More Tax Help, IRS News and Tax Relief Tips:

1. Tax Help News: IRS Enforcement to Get Priority, Big Bucks in 2010
2. IRS Tax Help For Small Businesses and High Income Earners Facing Increasing Tax Rates
3. We’ve Expanded to Help More Taxpayers Resolve Their IRS Tax Problems!
4. IRS Asserts Position on Tax Protesters: Sanctions Imposed for Advancing and Maintaining a Frivolous Argument
5. Could Expert Tax Help Have Boosted this CPA’s Chances of Fighting IRS Tax Evasion Charges?

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This entry was posted on Tuesday, August 25th, 2009 at 9:00 am and is filed under Seeking Professional Tax Help, Tax news and tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.