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Posted by James Simango, CPA
James Simango, CPA
James Simango CPA (U.S. Qualified), CPA Australia, B.Sc (Fin)(Acc) James is a
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on Friday, 06 January 2012
in IRS Problems

Six Ways To Avoid IRS Problems

For taxpayers looking for ways to avoid the last-minute rush for preparing and filing tax returns, it is important that you:

1. Organize Tax Records. Tax preparation time can be significantly reduced for taxpayers who develop a system for organizing their records and receipts. Start with the income, deduction or tax credit items that were on last year’s return.

2. Don’t Procrastinate. Resist the temptation to put off doing taxes until the last minute. Hurrying to meet the filing deadline may cause a taxpayer to overlook potential sources of tax savings and could increase the risk of making an error.

3. File Electronically. Aside from ease of filing, IRS e-file is the fastest and most accurate way to file a tax return. For those due a refund, the wait time for e-filers is half that of paper filers.

4. Double-Check Math and Data Entries. Taxpayers should review their return for possible math errors and make sure the names and Social Security or other identification numbers for themselves, their spouse and dependents are correct and legible.

5. Don’t Panic if Immediate Payment Is Not an Option. For those who can’t immediately pay the taxes due, consider some stress-reducing alternatives. A taxpayer can apply for an IRS installment agreement, suggesting their own monthly payment amount and due dates, and getting a reduced late payment penalty rate. Taxpayers also have various options for charging their balance due on a credit card, either as part of an electronic return or via a phone call to a processing agent. Official Payments Corporation may be reached at 1-800-2PAY-TAX (1-800-272-9829) or at The Link2Gov Corporation may be reached at 1-888-PAY-1040 (1-888-729-1040) or at There is no IRS fee for credit card payments, but the processor charges a convenience fee. Electronic filers with a balance due can file early and authorize the government’s financial agent to take the money directly from their checking or savings account on the due date.

Taxpayers who file their tax return or a request for an extension on time, even if they can’t pay, avoid potential late filing penalties.

6. Request an Extension of Time to File. If the clock runs out, taxpayers can get an automatic four-month extension of time to file. An extension of time to file is not an extension of time to pay, however. Taxpayers may call 1-888-796-1074, e-file a Form 4868 that is included in most tax preparation software, or send a paper Form 4868 to the IRS. Taxpayers who charge their expected balance on a credit card don’t have to file the form. Contact Official Payments Corporation or Link2Gov Corporation. There is no IRS fee for credit card payments, but the processors charge a convenience fee.

The extension itself does not give a taxpayer more time to pay any taxes due. The taxpayer will owe interest on any amount not paid by the April deadline, plus a late payment penalty if at least 90 percent of the total tax due has not been paid by April 15.

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James Simango

CPA (U.S. Qualified), CPA Australia, B.Sc (Fin)(Acc)

James is a licensed CPA in both the U.S. and Australia. He specializes in cross border tax issues between the U.S. and Australia.

He is a member of the American Institute of Certified Public Accountants (AICPA), CPA Australia, and is registered with the California Board of Accountancy, Virginia Board of Accountancy. James earned his Bachelor’s of Science in Finance and a Bachelor's of Science in Accounting from the Central Michigan University in the United States. Being both a U.S. and Australian qualified CPA, James brings you a more comprehensive view on your tax obligations and tax planning either in the U.S. and Australia.


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