Audit rates are highest for ones who claim the largest adjusted gross incomes.  Ironic, since most social media platforms are trying to get you to write just about everything off. After all, why shouldn’t we?  Lots of reasons.

While the IRS does not have the labor to analyze every return it does utilize triggers that rank returns for errors.  Here’s the list:

• If you received a W-2 or a 1099 of any sort, be assured, so did the IRS.  if their information does not match what you reported you can be sure to get a letter.
• Your itemized deductions exceed IRS targets.  Schedule A is where you claim Medical and Dental expenses, State and Local Taxes (SALT), Gifts to charity, Casualty and Theft Losses, and “Other Itemized Deductions”.
• Tax Shelter Losses such as Qualified Retirement Accounts, Insurance products, partnerships, municipal bonds, and real estate investments are all examples of potential tax shelters reducing one’s tax liability.  There are also phase out and rollovers that send red flags.
• Business expenses beyond stated income are a red flag.

The IRS has set up a “Taxpayer Bill of Rights”,  familiarize yourself with this.  The IRS also has an Independent Taxpayer Advocate Service.

Keep in mind the IRS uses 3 main criteria for audits:

1. Negligence: errors in entry.
2. Willful: intentional misstatement
3. Frivolous;  throwing something in there just to see if it sticks.

Each level has its won penalty and interest on monies withheld regardless of reason.

Keep in mind that there is no period of limitation for willful and frivolous.  These two are considered to be fraudulent and the IRS maintains that it can go back at any time to revisit this return.  You have three years to amend your return and the IRS has three years as well.  

When you fail to report an item which is more than 25% of the Gross Income, the IRS has 6 years after the return has been filed to assess additional taxes.  

The IRS always checks your return for computational accuracy and clerical errors, missing signatures, inaccurate Social Security Numbers, address, not checking boxes, (yes even that Presidential Campaign Box). not entering your occupation ( this is used by the IRS to determine what is reasonable or excessive). Not dating, incorrect banking information,  using a single account when filing MFJ, last but not least, the attachment sequence number found under the year,  those forms must be in order!!! The IRS will politely send those back and if you are not quick about it could result in a late return.  

Yes, You can file for free with the IRS,  When you do this is what you don’t get.  You dont get someone to represent you.  Did your electronic return get rejected? Can’t understand why? You are on your own.  Those letters you get, there is no one to go over them and help you understand the purpose behind them.  

There are three types of audits

1. Correspondence
2. Desk/Office
3. Field Examination

While you want to be expeditious about following through with the audits, do not allow the IRS agent to rush you before you are ready.  Always schedule at your convenience. 

Never volunteer records or provide information not requested.  Yes, loose lips just might sink your ship. Your representation (F2848), may sit for your audit.  The IRS must issue an Administrative Summons if they want you present.  Be organized. Be prepared.  Desk and Field Examinations can be recorded if you give a written notice no later than ten days of the appointment.

Remember, if your tax preparer talks you into a tax position that does not make sense or sounds too good to be true, it probably is.  At the end of the day you’re responsible for what goes in your return.  It is your obligation to provide your tax preparer all pertinent information to get the best options for a refund without being audited.  You also do not want to do anything that will cause a rejected return or hold up your refund.  

Finally,  the IRS has a list of the “Dirty Dozen”,  these are common tax scams that are still prevalent especially in this digital age.  Of these the Offer In Compromise or Resolution businesses you hear on the radio are one of the biggest most hurtful scams to the common Individual Tax Payer.  

Be diligent about keeping track of your records.  Please do not hesitate to reach out to us if you have any questions about a tax letter you received, if you want to understand your tax situation better, if you have had any life events that may impact your return at the end of the year. 

IRS scams. Four things to know.

1) The IRS will not reach out to you by email or social media.

2) The IRS will not reach out to you by text message.

3) The IRS will not reach out to you with fake websites. Take a look at the address bar. This will be a dead give away.

4) The IRS will not reach out to you by phone with threats or insisting you resolve back tax issues by purchasing third party bank cards.

That’s it! The IRS always only ever reaches out to you by mail. By paying attention to your standing with the IRS it is very difficult for scammers to take advantage of you. Follow the link below to see the IRS video for this subject.

To report IRS scams go to IRS.gov/scams

By March 1st, 2025, only 40% of Petaluma residents will have filed their taxes.

Start 2025 with confidence and peace of mind. 

Call (707) 385-9658 to schedule a personal appointment conveniently located at Keller Co-Works.  Parking is covered and free.  The $80.00 non-refundable consultation fee will go toward your return.  If you choose to not use Jamison’s, you can still use the remainder of your fee to ask questions throughout the year.  Either way you have a Professional Tax Consultant in your corner.

There are a dozen reasons why taxpayers find themselves unable to file in a timely manner.  However stressful filing taxes may be, the stress does not go away knowing penalties and interest on taxes owed will be attached.  Now is a good time to reach out to Jamison’s Tax Consulting regarding your individual needs.  It is also a good time to check for common reasons that cause returns to be delayed or rejected.

In 2023, 30,163 taxpayers submitted Offers in Compromise amounting to $214.5 million. This is revenue that our government budgeted for that they are not getting.

Of the sources of revenue, Individual Income is the largest category defaulted on the tax responsibility.

$25.6 billion in additional taxes for untimely returns amounted to $2.8 billion. $ 104.1 billion in unpaid assessments on returns with additional tax due netting $68.3 billion.

Of the lowest Civil penalties to the IRS were Business Income, Estate and Gift tax approximately $5 billion compared to the $45 billion in Individual returns.

Individual returns represent 9x’s the default rate above all the other sources of revenue our government must work with.

So, the question and answer I pose regarding this issue is this. Why is it such a challenge the average American wage earner have such a difficult problem meeting their tax obligations and responsibilities? This is what I propose. I propose that unlike businesses and estates, the average Jack and Jill do not have year-round access to professional tax consulting to address life events that arise year-round.

As a result, they are looking at surprise tax obligations that often cripple them financially. Penalties, interest, levies, and liens are all resources the government utilizes to enforce the obligations that individuals are accountable for every year.

Jamison’s assists taxpayers to resolve problems and recommends changes to minimize issues. 

As your taxpayer advocate, we strive to make navigating tax compliance and maximize tax credits and refunds based on your individual circumstances. 

We educate you on your Rights as a Taxpayer

We connect you with a Taxpayer Advocate

We work with you in seeking out Low Income Taxpayer Clinics

We assist you when the IRS Free return preparation sites such as AARP, VITA, or the online Free Tax Software turns out to be a poor fit for you. 

“Can we talk?” tax series will be addressing common tax issues.  These talks are free to the public as a way for Jamison’s to give back to the community. 

Paying Taxes

          Resolving a balance due

          I cant pay my taxes

          Offer in Compromise

          Currently Not Collectible

          Payment Plans and Installment Agreements

Issues and Errors

          I made a mistake on my return

          Under reported income

          Incorrect Tax Return

          Amending a Tax Return

          Injured Spouse

          Identity Theft

General Tax Topics

Affordable Care Act

Covid 19 Tax Updates

Getting an ITIN

I got a notice from the IRS

Getting a Transcript

I have a Cancellation of Debt 1099-C

Name, Image and Likeness

Digital Assests

Filing Returns  

          I received a 1099-K

          Filiing Season Resources

          Options for Filing a Tax Return

          Free File Options

          Consequences of not filing

          Choosing a Tax Preparer

          Tax Return Preparer Fraud

          Volunteer Income Tax Assistance and Tax Counseling for the elderly (TCE).

Extensions

Charitable Contributions

Refunds

          I don’t have my refund

          Locating a refund

          Lost or Stolen Refund

          Hold or stopped refund

          Refund Offsets

          Expediting a refund

Credits

          Health Care Premium Tax Credit

          Claiming the Earned Income Tax Credit

          Education Credits

          Home Credits          Child Tax Credits and Other Dependent Care Credits

What to look forward to for your 2024 Tax Year Individual Return?

Primarily the Standard Deduction.  An increase of $750.00 from 2023. 

Keep in mind that many of the tax write-offs that we enjoyed are no longer on the table, which explains the jump in Standardized Deductions. 

While the marginal tax rates have remained the same the amount of income in each tax bracket has increased.

Earned Income Tax Credit for qualifying taxpayers of three or more children has increased.  However, pay attention to “phase-out”.

The annual exclusion for gifts increased to $18,000.

The Lifetime Learning Credit has not been adjusted for inflation and is phased out for taxpayers with a modified adjustment gross income of over $80.000. 

n conjunction with the IRS, Jamison’s is promoting Fraud Awareness Week

Fraud Awareness Week is not just about ID Fraud. It includes Tax Scams that can be crippling for the taxpayer. Examples include:

Bad tax advice on social media encourages “unreasonable” tax positions on your tax forms related to credits and refunds. The IRS will never:

·         make demands.

·         threaten to arrest or deport.

·         They will only reach out to you if you provide them with your phone and email address.

·         They typically initiate communication through letters. Go onto your MyIRS and look for your letter.

Other scams include.

·         Charity Impersonators

·         Credit/Refund misinformation.

·         Seniors

·         Tax debt/ relief services.

·         Unclaimed refunds

Check it out. Copy and paste this link.

https://www.irs.gov/newsroom/irs-international-fraud-awareness-week-highlights-how-to-report-fraud-taxpayer-protection-against-scams-schemes#:~:text=During%20International%20Fraud%20Awareness%20Week,affecting%20taxpayers%20across%20the%20country.

VPN’s, MFA’s password management, antivirus software…. In a world where we are becoming more reliant on the digital age our not so digital personal information is at risk!!! How do we stay on top and ahead of the hackers that can literally immobilize us with sophisticated software programs? 

Like it or not we must take time to educate ourselves.  Companies find it far more efficient to work digitally.  So, what is a person to do?  For older people this can be overwhelming which makes them great targets for scams.  It is so easy to sell our own information on the web when companies force us to opt in with emails and other personal information that can be used to track our behavior. 

Be diligent.  If you get an email from someone asking you to call their number or follow their link don’t.  You have your account information.  Use it to reach out to the company to confirm that they are trying to reach you.  Half the time it is bogus. 

Take time every week to restart and refresh your computer and software system.  Delete cookies from your history.  Especially after browsing.  Don’t use third party apps. 

In case I have not mentioned it before, create your online account with the IRS.

This is a great way to keep tabs on fraudulent returns.  

You can go online to the IRS website to file for free if you meet certain requirements.

This is what you don’t get:

·        If your return is not accepted, you don’t get support to troubleshoot.

·        You don’t get Refund Advance options.

·        You don’t get ID protection.

·        You don’t get a $2500.00 tax preparation guarantee.

·        You don’t get year-round tax advice.