IRS

With the recent addition of 87,000 new IRS agents many commentators are saying you have nothing to be concerned about as long as you file correctly. Be careful. In the law you are considered innocent until proven guilty but with the IRS the opposite is true. They accuse and you must prove your innocence. With the law you have the right to remain silent but with the IRS you go to jail if you fail to speak up. If you only have one source of income and that is your job there is not much that can go wrong when you prepare your taxes but anything more complicated can lead to problems. There are many examples of people who called in with tax questions and got different answers from different IRS employees. Other answers you give can lead to problems. Here is a personal example. I owned a business that was on one of two lots which were the same size. In filling out the tax return it is necessary to separate the land from the building when depreciating since land does not depreciate. I contacted the IRS and they told me to put down what I thought was right and they would let me know if they disagreed. Fortunately I had the spare lot to help with in determining the value of the land and use the taxable value of the extra lot to determine the value of the lot that the building sat on. Remember that the IRS uses what they call suspicious activity to determine who gets audited. Even if you are innocent and you are chosen for an audit it can be stressful and may be expensive if you have to hire legal help. Don't do anything that may be considered suspicious. Good luck with that.