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Detroit Tax Law Blog

A tax mistake is not the same as tax fraud

It doesn't matter if you complete and file your own income tax return or hire a professional to assist you, there is always the chance that you will make a mistake.

It goes without saying that you do your best to avoid mistakes, but these have a way of popping up every now and again. After all, there is nothing simple about the IRS tax code.

The basics of how Michigan taxes lottery winnings

Winning the lottery can be an amazing stroke of luck. You can pay off your debts and indulge yourself and your loved ones. Unfortunately for some people, winning the lottery can result in tax issues. If you have won a lottery prize, that income is subject to federal, state and local income taxes.

In some cases, those who win money can find themselves in legal trouble if they fail to claim the income from lottery winnings on their tax return. If you regularly play the lottery in Michigan, you should take a moment to familiarize yourself with the tax rules for lottery earnings.

Will correcting or amending your tax return lead to an audit?

Mistakes happen. When you're talking about filling out complicated and confusing federal tax forms, it's easy for people who do their own taxes to make mistakes. Maybe you forgot to list your international bank accounts. Maybe you changed jobs and forgot about the W-2 from your former employer. It's even possible that a glitch in the tax preparation software you use could cause you legal and financial issues.

Calculating your taxes exactly is a precise process, and omitting any amount of data could impact how much you owe or how much you can expect to get back from the IRS.

What should you do about a tax audit?

No matter how hard you try to avoid an income tax audit, one could come into play at some point. In short, this means the IRS wants to learn more about your tax filing to make sure the information you provided is accurate.

You have every right to be concerned about a tax audit. Of course, this doesn't necessarily mean you will end up owing more money or facing a criminal charge.

Are you familiar with the common forms of tax fraud?

As a United States citizen, it's always a good idea to have a strong grasp of the tax system. In addition to federal taxes, you should know where you stand with regard to state and local taxes.

By understanding the system and doing whatever it takes to stay within the legal limits of the law, you never have to concern yourself with trouble. Unfortunately, there are times when people get the idea that they can pay less than what they owe. As a result, the IRS may step in and charge them with tax fraud.

5 key stats about IRS audits and income levels

You filed your taxes, and you honestly tried to do them correctly, but you're worried. What are the odds you're going to get audited? Did you make any mistakes that could trigger an audit, even if you made them honestly? Is the IRS going to come calling sooner rather than later?

These are all concerns that a lot of people deal with during tax season, and they can generate quite a bit of stress. To help you see the real picture, here are some key stats from the IRS Data Book:

Will Earned Income Tax Credit claims result in an IRS audit?

For most people, filing taxes is a frustrating technicality each year with the potential benefit of a refund check. However, for a small percentage of people, tax season doesn't just culminate in the acceptance of your tax return. It results in a pending audit.

Few things in life are as stressful and terrifying as the process of getting audited by the IRS. Are they reviewing this year, or several previous years, too? What kind of financial records are you going to need to provide? No matter your income or your risk level, if you are facing an IRS audit, you want the advice and help of an experienced tax and audit attorney.

Don't let divorce put you in the crosshairs of an IRS audit

As you are aware, divorce changes many aspects of your life. While you may think that you have prepared for most of the changes your new status as single has brought, you may be overlooking a major transition - your status as a taxpayer.

The Internal Revenue Service anticipates that many American taxpayers may understandably be confused about their new filing status and prepared a publication regarding tax consequences for divorced individuals. To avoid getting audited, below are some salient points to remember when filing your 2016 taxes.

How to avoid being targeted for an audit by the IRS

There are few life experiences that inspire as much fear as learning that you are being audited by the Internal Revenue Service. While only one percent of the tax returns filed by taxpayers in the United States get flagged for audits, when you are in that number, it can be seriously uncomfortable. It's definitely not the elite one percent group to which anyone aspires to belong.

But it's also not the end of the world. Before you go into panic mode and worry that this year will be the year they come for you, take a few deep breaths and relax. Then read the tips below to minimize your chances of submitting a return that will warrant a closer look from the feds.

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