Getting in trouble with the IRS

You don’t want to mess with the Internal Revenue Service. One small mix-up when handling your finances can cost you big.

For example, in recent years the IRS has increased its filing of levies, liens and wage garnishments. In fact, in 2004 alone, approximately 2.5 million levies were filed.

The experts at JK Harris & Co., one of the nation’s largest tax resolution firms, offer this list of common ways people get into trouble with the IRS.

1. Filing too many exemptions. An exemption gives you a major tax deduction, and some taxpayers can’t resist the temptation to report more exemptions than they’re entitled.

You can only claim exemptions for yourself, a spouse and for all “dependents.” Dependents have to meet specific criteria, however, so make sure you follow the IRS guidelines so that you don’t mistakenly file an extra exemption.

2. Being unaware of taxes levied for early withdrawal from certain retirement plans. If you withdraw from a retirement fund such as a 401(k) or IRA before you’re 59 1/2, you may face a 10 percent federal penalty on your investments, as well as a state penalty and an income tax on the money withdrawn.

3. Not paying enough taxes when self-employed. Many people who own their own businesses don’t know how much they have to pay in taxes. The tax structure for a self-employed person – what to pay, how to pay and what can be deducted – is decidedly complex, so it’s easy to become confused.

4. Not paying taxes on winnings. It is necessary to report all gambling winnings, including winnings from lotteries, casinos and horse races, as income.

For people who are in trouble with the IRS, there are various programs available that can provide debt relief if a taxpayer qualifies. JK Harris helps its clients determine if they meet the requirements for one of these IRS programs. Its staff includes former IRS agents, certified public accountants, attorneys, enrolled agents and other experts that offer tax services, financial planning, small business services and other assistance.


Our team of licensed or enrolled tax agents can help you with any kind of tax levy you may have. We have many years experience dealing with the IRS so we know exactly how tax levies work and how to take care of them. We will aggressively represent you and may find the best solution for your tax problems. Call toll-free 800.293.1697 Mon-Fri 6am-6pm to speak to one of our professional tax experts and get a FREE evaluation so we can better serve your tax relief needs.

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