AARP "10 Common Tax-Filing Mistakes to Avoid" David Selig, Selig & Associates

The IRS is holding more than $1 billion in unclaimed refunds from 2013 alone.

Even with three extra days to submit your tax return this year, it’s easy to make a mistake when you’re rushing to get through the tedium of filing.

Here are some common tax-filing errors the IRS and accountants see year after year. 

More on Taxes

• Tax-Friendly States
• Avoid a Nasty Tax Surprise
• 10 Smart Ways to Use Your Tax Refund

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1. Transposing numbers

This is often the No. 1 mistake by filers. Tax software will catch math errors, but it won’t know that your $1,500 in interest income was accidentally inputted as $5,100, says Kay Bell, author of The Truth About Paying Fewer Taxes.

“Your software doesn’t know you transposed it. It’s just going to keep adding that wrong amount throughout all the process,” Bell says.

The IRS likely will catch the mistake later. But if the error caused you to underpay your taxes, you could owe interest and a possible penalty, she says.

2. Not filing

If your income last year was low enough — under $10,350 for singles and $20,700 for joint filers — you don’t have to file a federal tax return. This would be an error, though, if federal taxes were taken out of your paycheck, says Lisa Greene-Lewis, a certified public accountant with TurboTax. You could be missing out on a refund of those taxes.

The IRS recently reported that it’s holding more than $1 billion in unclaimed refunds from taxpayers who didn’t file a return in 2013. These taxpayers have until this year’s deadline on April 18 to file a 2013 return to claim their money. Otherwise, after three years, unclaimed refunds become the property of the U.S. Treasury.

3. Fear of filing

Once some people figure out how much they will owe the IRS, they decide not to file a returnbecause they don’t have the money to pay, says Deborah Gregory, a former IRS attorney and partner in the Texas-based Gregory Law Group. Bad move. The failure-to-file penalty is higher than the penalty for not paying, she says.

“So if you can’t pay all that you owe on time, you should still file your return and pay as much as you can,” she says. Then take advantage of one of the IRS payment options to make good on the rest.

4. Wrong route

Make sure you provide the correct routing number if you want the IRS to directly deposit your refund in your bank account.

“I’ve heard plenty of horror stories about the government depositing refunds into the wrong account,” says David Selig, founder of TrueTaxHelp.com.

Sometimes the IRS discovers the mistake and cuts you a check instead, which can delay your refund, says IRS spokesman Eric Smith. Contact the IRS and your bank if you noticed you made this error, he says.

5. Incorrect names

His friends knew him as Machine Gun Kelly, but to the IRS he was always George Barnes. Don’t use a nickname when filing your return and be careful not to misspell your name either.

“The government is cracking down on identity theft, and misspelled names are suspicious and may indicate fraud,” Selig says. “This simple mistake can take months to correct.”

The correct name is the one on your Social Security card. So if you changed your name and haven’t yet notified the Social Security Administration, you’ll have to use your old moniker.

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6. Extension confusion

The IRS will grant you an extra six months to file your return if you ask for an extension by the April deadline. But some people mistake this extension of time with more time to pay, says TurboTax’s Greene Lewis. No so. You still have to pay taxes by the April deadline.

7. Incorrect filing status

You got married — or divorced — in 2016. Do you file as a single or married person on your return?

“The filing status is determined by the current status on Dec. 31. So if you got married on New Year’s Eve, you’re married all year,” says Abby Eisenkraft,  author of 101 Ways to Stay Off the IRS Radar. “If you got divorced on New Year’s Eve, you’re single all year.”

You also may qualify as a head of household if you were single at the end of the year, financially support a dependent — who could be a child or parent — and provide more than half the cost of running your home.

Filing status often trips up filers and can affect their tax bill.

8. Forgetting income

You’ll receive a 1099 form if you’ve earned at least $600 from a part-time gig as a contractor, sold securities or earned interest or dividends on your investments. The IRS receives copies of the 1099s, too. So if you neglect to report this income, count on hearing from the IRS when it discovers the discrepancy between what you claimed and what the 1099s show.

9. Not taking RMDs

After hitting age 70½, retirees must take required minimum distributions (RMDs) from traditional IRAs and 401(k)s. Failing to do so, leads to a 50 percent tax on the amount that should have been withdrawn.

If you didn’t take a required distribution, you should file Form 5329 with an explanation of what happened and what you have done to correct the problem, says the IRS’ Smith. The agency may waive the hefty tax, particularly if this is your first time taking required distributions.

10. Risking your passport

The IRS is expected to start notifying the State Department this year of people who are more than $50,000 in arrears on their taxes — and not working with the agency to resolve the issue. The State Department then can revoke their passports or deny their applications for one.

If you’re seriously delinquent on taxes, it’s time to make nice with the IRS and set up a payment agreement.

Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in payroll, income and sales tax controversies for individuals, contractors, restaurants and professional practices. We settle contested tax audits; payment plans, compromise tax debts, and resolve all marital tax issues, including innocent spouse relief and separation of liability. (212) 974-3435

Tax Tips: Hiring New Employees

Tax Attorney Bradley H. Dorin

On Hiring New Employees

Eligibility for employment. You must verify that each new employee is legally eligible to work in the United States. This includes completing the U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You can get Form I-9 at uscis.gov/ forms, USCIS offices, or by calling 1-800-870-3676. For more information, visit the USCIS website at uscis.gov/i-9- central or call 1-800-375-5283 or 1-800-767-1833 (TDD). 

New hire reporting. You’re required to report any new employee to a designated state new hire registry. A new employee is an employee who hasn't previously been employed by you or was previously employed by you but has been separated from such prior employment for at least 60 consecutive days.

Many states accept a copy of Form W-4 with employer information added. Visit the Office of Child Support En- forcement website at acf.hhs.gov/programs/css/ employers for more information.

W­4 request. Ask each new employee to complete the 2017 Form W-4. See section 9.

Name and social security number (SSN). Record each new employee's name and SSN from his or her social security card. Any employee without a social security card should apply for one. See section 4. 

Social security and Medicare tax for 2017. The social security tax rate is 6.2% each for the employee and employer, unchanged from 2016. The social security wage base limit is $127,200.

Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in payroll, income and sales tax controversies for individuals, contractors, restaurants and professional practices. We settle contested tax audits; payment plans, compromise tax debts, and resolve all marital tax issues, including innocent spouse relief and separation of liability. 

Now that it’s Tax Time, AARP asks Selig to explain Common Mistakes Senior’s make

Believe it or not, inverting numbers is Public Enemy Number 1# says David Selig of Selig & Associates. This faux pas happens frequently and with simple calculations, dates of birth and Social Security Numbers.

After that are misspelled names and nicknames. The government is cracking down on identity theft, and misspelled names are suspicious, and may indicate fraud. Accordingly, this simple mistake can take months to correct, says Selig.  

A lot of people like to receive their tax refund via “direct deposit”. But be careful advises Selig, and make sure you provide the correct routing number, or suffer the consequences.  I’ve heard plenty of horror stories about the government depositing refunds into the wrong bank account.    

Lastly, be sure to include every 1099 you receive, or pay the piper. And don’t forget to keep a copy of your tax return with your important papers. 

Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in payroll, income and sales tax controversies for individuals, contractors, restaurants and professional practices. We settle contested tax audits; payment plans, compromise tax debts, and resolve all marital tax issues, including innocent spouse relief and separation of liability. 

Selig & Associates saves “Happy Client” over $892,100. IRS Reverses Position – All is Forgiven

Our client was audited by the IRS. The Auditor disallowed various expenses and disagreed with the way certain transactions were reported. When the Audit was over, our client was presented with a $900,000 bill. We were retained and for strategic reasons, elected not to petition the US Tax Court. Instead, we bifurcated the issues by filing an Offer in Compromise citing doubt as to liability and a Redetermination of Audit. In February 2017 we settled with the IRS for approximately $7900. 

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Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in payroll, income and sales tax controversies for individuals, contractors, restaurants and professional practices. We settle contested tax audits; payment plans, compromise tax debts, and resolve all marital tax issues, including innocent spouse relief and separation of liability. 

“If You Haven’t Filed a Tax Return in Years - You’re a Criminal” Call Selig & Associates for Immediate Assistance (212) 974-3435

Imagine how embarrassed you’ll feel if you’re arrested, charged and convicted of tax evasion.

Imagine what your children will think when Special Agents take you away.

Imagine what your friends and neighbors will say.  

If you act quickly, you can still get out of this mess.

It’s not to late - but you’ve got to act quickly.

Call Selig & Associates immediately (212) 974-3435

We’ll get you into legal filing compliance within 24-48 hours.

We’ll deal with every aspect of your Tax Problem. 

And we’ll fight like hell to knock the heart out of the Government’s case.

Selig & Associates provides the most aggressive tax representation allowed by law.

_{Specializing in payroll, income and sales tax controversies for individuals, contractors, restaurants and professional practices. We settle contested tax audits; payment plans, compromise tax debts, and resolve all marital tax issues, including innocent spouse relief and separation of liability.} 

_{Additionally, we successfully represent Contractors and Subcontractors before the New York State Department of Taxation and Finance, the Department of Justice Tax Division, the Internal Revenue Service, the District of Columbia Office of Tax and Revenue, the Pennsylvania Department of Revenue, the Georgia Department of Revenue, the California Franchise Tax Board and the Defense Office of Hearings and Appeals (DOHA).} 

6 red flags that trigger an audit by the IRS

David Selig on PIX 11 March 20th 2017

New York-based federal tax practitioner David Selig shared these red flags that would cause an audit by the IRS.

Math Mistakes

The most common error leading to an audit is simple mistakes or errors. This can mean writing the incorrect number in a blank, addition numbers incorrectly, or other simple math errors. While there may have been no intent to deceive the IRS behind honest mistakes, such errors can still to you being fined by the IRS if the errors mean you paid less income tax than you actually owed.

Liberal Use of Rounding

While it is fine to round your numbers to the nearest dollar, if you round them to the nearest hundred or even thousand, it looks suspicious. Real-world income and expenses rarely round to an even $500 or $1000. Therefore, if your return has numerous numbers, it can lead the IRS to believe the numbers are made up.

Overstating Charitable Deductions

If you give money or other items to charity, you have every right to claim the value as a deduction on your tax return when you itemize. However, the IRS has a normal amount of charitable giving they expect to see for a household that makes a certain amount of income. If your charitable deductions are too high for your income, the IRS may believe you are overstating just how generous you are.

Omitting 1099s

When you are paid for work, you generally receive a 1099 after the tax year to show the total amount you earned. If you have multiple jobs, you will receive a 1099 for each of them. Many people do not realize that the IRS is also sent a copy of each 1099. Therefore, if you fail to include one of those 1099s in your tax return, it appears to the IRS that you are trying to under report your income and therefore pay less income tax than you actually owe.

Claiming Too Many Business Deductions

It is common for people to have side businesses in addition to a normal nine-to-five job. And while side businesses can have deductible business expenses, excessive deductions can be a sign that someone is trying to take advantage of the IRS.

Obtaining Help with Your Tax Return

You can always turn to a tax professional to get help completing your tax return. A tax attorney is someone who is knowledgeable of the tax laws relevant when completing a tax return and they provide confidentiality over whatever you tell them, which is something you will not get from an accountant or a preparer you might find set up at your local big-box retailer. So if you need help with your tax return, call the phone number located at the top of this page today. A tax attorney will get in touch with you to answer all of your questions. And there is no obligation or charge with having an initial conversation. Therefore, you have every reason to make that call today and get the peace of mind at having your tax return prepared and filed correctly.

Has the NYS Tax Department Gone Rouge? Or Are They Just Following Orders – Selig calls for a Special Attorney and Investigative Oversight

The New York State Department of Taxation and Finance has become capricious, heavy-handed and Naziesque, says David Selig of Selig & Associates. Over zealous Collection Enforcement Agents are padlocking businesses, suspending Drivers licenses, inflating and falsifying tax liabilities and corkscrewing business-owners into paying usurious penalty and interest rates. Astonishingly, these “rouge Agents” are costing taxpayers twenty to twenty-five  (20 - 25) times more than they collect.

For example, earlier today Five Enforcement Agents for the New York State Department of Taxation and Finance and Four uniformed Police Officers stormed a local business; ejected it’s employees; emptied the cash register, and padlocked the door.

Why? Because the owner of the business owes the Tax Department Forty Thousand Dollars ($40,000).  The business-owner wanted an installment agreement but the State or more apropos, the State’s Collection Agent arbitrarily refused. And now (because of the Agent’s heavy-handed tactics) several employees are out of work, the landlord won’t be paid, orders won’t be filled - and the tax debt that precipitated this seizure, will remain repaid. 

The problem has become so pervasive, that Selig is calling for a Special Attorney and Investigation of the Entire Collection Department.  For more information call Selig & Associates directly.

Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in payroll, income and sales tax controversies for individuals, contractors, restaurants and professional practices. We settle contested tax audits; payment plans, compromise tax debts, and resolve all marital tax issues, including innocent spouse relief and separation of liability.