It’s Tax Tune-Up Time!

By Jaclyn Quinn, Esq.

Deputy Director at DCRAC

Personal testimonials on TV about problems with the IRS always manage to grab the ear because the stories are so human and real. Have you ever found yourself saying “there but for the lack of an IRS audit, go I?” Now, maybe you always get a refund either by planning or the good fortune of adequate withholding. But for many, the tax season is synonymous with stress, hardship, and a mess of paperwork. 

Understand that if you live in Delaware and have a tax problem with the IRS or Delaware Revenue, you don’t need to address and untangle the tax issues alone, regardless of how old or recent they are. And you don’t need to have a minimum liability of $10,000 owed to the IRS to get free or low cost help in dealing with your tax problems.

Tips first 

The best self-help you can provide to yourself and those around you is to know where to find answers to begin the process of balancing your books with the IRS. Despite misgivings you may have, IRS.gov is an excellent source of information, including publications, fact sheets, and videos that guide you through certain tax scenarios. Also, don’t hesitate to call the IRS at 1-800-829-1040 to request copies of all IRS documents that set out their reasons for wanting back taxes and penalties if that is your tax situation. Only after you have received, read and considered that information should you decide how to proceed.

We checked in with DCRAC’s dedicated Tax Attorney Anthony Dohring and he shared 9 suggestions for the 2020 tax season if you are filing an individual tax return:

1. DON’T IGNORE A LETTER FROM THE IRS!
2. Have your federal tax return postmarked by April 15, 2020.
3. If you file for an extension beyond April 15, you must remit your estimated tax liability with the extension. 
4. Save your receipts and keep good records. A box, a folder, a spreadsheet, a notebook. Use what makes sense for you. 
5. If you file jointly, amounts owed to the IRS are presumed to be joint. 
6. Be sure dependents you claim cannot be claimed by another.
7. If you owe, establish an affordable repayment plan as soon as possible. 
8. Don’t be shy about reaching out to the IRS Office in Wilmington where you can obtain account information. 
9. BEWARE OF SCAMS. THE IRS NEVER EVER CALLS YOU FOR INFORMATION!

If you are a business owner, you know there are additional steps to ensure you have an accurate filing each year. A good practice is to do a monthly review of your books. This makes the task of record keeping more manageable and typically recollections of income, receipts and expenses are more accurate if made monthly rather than yearly. Take the time (and sometimes money) to invest in a record keeping system that works for you. Business and personal accounts should be maintained separately, and depending on the business entity you’ve chosen, you will either file taxes for your business on a separate IRS tax form or you will use a Schedule C on your 1040 tax form. 

DCRAC Can Help

While DCRAC LAW was established in 2019, DCRAC’s Low Income Tax Clinic has been operating since 2003. We’ve represented thousands of taxpayers in disputes totaling millions of dollars. We are familiar with the IRS audit, collection, and legal processes, which allows us to spot issues and work toward the best possible outcomes for our clients. Some clients must take their cases to U.S. Tax Court, while others are able to mitigate penalties by correcting returns and making their case to a revenue officer. While DCRAC’s mission is to serve the low-income population, we can also represent clients on an income-based fee structure. The DCRAC Tax Clinic is one of several services provided through DCRAC LAW, Delaware’s only low bono law firm. Our areas of practice include wills, trusts, and estate planning, property transfers, and small business representation from formation through execution. Jaclyn Quinn and Anthony Dohring are licensed to practice law in Delaware. For more information, or to schedule a consultation, please call (302) 298-3251 or email Jaclyn at [email protected]. Visit us online at www.dcrac.org for more information.