4 Reasons People Get Into Trouble With the Irs

For example, in recent years the IRS has increased itsincome tax on the money withdrawn.
filing of levies, liens and wage garnishments. In fact, in3. Not paying enough taxes when self-employed. Many
2004 alone, approximately 2.5 million levies were filed.people who own their own businesses don't know
The experts at JK Harris & Co., one of the nation'show much they have to pay in taxes. The tax
largest tax resolution firms, offer this list of commonstructure for a self-employed person - what to pay,
ways people get into trouble with the IRS.how to pay and what can be deducted - is decidedly
1. Filing too many exemptions. An exemption gives youcomplex, so it's easy to become confused.
a major tax deduction, and some taxpayers can't4. Not paying taxes on winnings. It is necessary to
resist the temptation to report more exemptions thanreport all gambling winnings, including winnings from
they're entitled.lotteries, casinos and horse races, as income.
You can only claim exemptions for yourself, a spouseFor people who are in trouble with the IRS, there are
and for all "dependents." Dependents have to meetvarious programs available that can provide debt relief
specific criteria, however, so make sure you follow theif a taxpayer qualifies. JK Harris helps its clients
IRS guidelines so that you don't mistakenly file an extradetermine if they meet the requirements for one of
exemption.these IRS programs. Its staff includes former IRS
2. Being unaware of taxes levied for early withdrawalagents, certified public accountants, attorneys, enrolled
from certain retirement plans. If you withdraw from aagents and other experts that offer tax services,
retirement fund such as a 401(k) or IRA before you'refinancial planning, small business services and other
59 1/2, you may face a 10 percent federal penalty onassistance.
your investments, as well as a state penalty and an