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Detroit Tax Law Blog

Non-profit accounting and tax mistakes: A must to avoid

If you are part of a non-profit organization, it's imperative to have a clear understanding of your tax situation.

When it comes to matters of accounting, there are things you should and shouldn't be doing. Unfortunately, it only takes one mistake to cause serious trouble, such as losing your status as a non-profit organization.

The finer details of an offer in compromise

Going through a tax audit is every bit as stressful as it sounds. If you find yourself in this position, you shouldn't hesitate to learn more about what's going on. This will allow you to make informed and confident decisions as the days go by.

Don't be surprised if your audit turns up that you owe additional money. In a perfect world, you'd have enough money to pay this in full to put your troubles in the past once and for all. However, this is not always the case.

5 examples of tax fraud

You're worried about tax fraud allegations. You dread having an IRS agent knock on the door. Every year that you file your taxes, it's hard to fight down the stress and anxiety.

The first thing you should know is that you must intentionally commit fraud. An honest mistake isn't fraud. Doing something to intentionally mislead the government is.

What can you do to prevent a tax audit?

As a taxpayer, you do whatever it takes to provide accurate information to avoid trouble with the IRS. But regardless of what you do, there is always the potential for a tax audit at some point in the future.

Fortunately, there are a few things you can do to prevent a tax audit. These tips don't guarantee that you will avoid this situation, but they can't hurt:

  • Double check your math before filing your final return. Yes, this will take a little bit of time, but it can go a long way in helping you avoid trouble in the future.
  • Don't bend the rules or stretch the truth. When it comes to filing a tax return, honesty is the best policy. As long as you are honest on your return, you don't have anything to worry about. Even in the event of an audit, you know you didn't do anything wrong.
  • Don't go overboard with deductions. There is nothing wrong with taking advantage of the deductions that you qualify for. However, you shouldn't go overboard to the point of stretching a bit too far with the idea of saving money.
  • Take advantage of e-filing. According to the IRS, an electronic return reduces the likelihood of an error. Conversely, it also reduces the likelihood of an audit.

Does your tax return contain any of these red flags?

Do know someone who has received a notice from the Internal Revenue Service (IRS) about an impending audit? Have you been so unfortunate as to receive one? If so, you may be wondering how the IRS decides which tax returns to audit. Is it random? Is there a complicated algorithm they use to decide? Or, are there certain red flags that IRS agents look for when they process tax returns?

While the odds of receiving an audit notification tend to be low, there are things that might be on your tax return that could trigger one of those dreaded IRS notifications. To find out some tax items that the IRS usually considers to be red flags, read further.

What happens if you don’t file your tax returns?

As a citizen of the United States, you need to learn as much as you can about the tax system. While it's complicated, knowing the basics will go a long way in keeping you out of trouble.

Here's something you need to think about: You need to file your annual tax return on time.

Nonprofit corporation: Answer these questions about donations

If you are starting a nonprofit corporation, there will be many details that require your attention. Many of these are related to your financial and tax situations, so it's important to get on the right page from the start.

Many people assume that they can start a nonprofit corporation, collect donations, and not pay any taxes. While you may be right, it's imperative that you have a clear understanding of how donations come into play.

What are some of the top tax audit triggers?

There is only one thing worse than receiving notice of a tax audit: receiving notice when you have reason to believe that you may have done something wrong.

There is no denying the fact that a tax audit can be both unpleasant and stressful. Despite your feelings, you don't have any choice but to supply the IRS with the information they require. Neglecting to do so is only going to put you in a worse situation.

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.

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