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Top 10 Fears and Facts About Taxes and the IRS

by Diane Kennedy, CPA   

Fear #1: It isn't legal or ethical to save on taxes.

Fact: Well, let's see what a Supreme Court Justice had to say about that. Justice Learned Hand said, "There is nothing sinister in arranging one's affairs so as to keep taxes as low as possible. Everybody does so, rich and poor, and all do right. Nobody owes any public duty to pay more than the law demands."

Fear #2: How come no one else I know is doing this? It must not be right.

Fact: The rich think differently about money and about taxes. We teach the uncommon wisdom that the rich use to legally, ethically and morally reduce taxes. If you haven't heard about this, it's likely because the people you have talked with don't know these tax secrets.

Fear #3: The IRS will take everything I own and put me in jail.

Fact: We teach the way to correctly take deductions, so you are protected in case of audit. If the IRS were to select you for audit, the IRS would want to see that you had proper documentation. We teach that audit defense.

Fear #4: The IRS will audit me if I change the way I do my return.

Fact: The IRS does not flag your return for audit simply because you change the amount of your income, deductions, or business structures. The most common reasons for an IRS audit are:

  • Mistakes made in math on the return

  • Amounts reported do not agree to W-2s, 1099s, and 1098s reported to the government by others

  • The return was not signed

  • Schedules were not correctly completed

Fear #5: The IRS is everywhere and knows everything. They are to be feared.

Fact: The IRS audit rate is continuing to decline. When the average return is audited, most items can be handled entirely through the mail or fax. And, in all cases, you can appoint an IRS representative to handle all of the issues. The IRS will aggressively pursue taxpayers who fall in the following categories. If you want to minimize your IRS audit risk, don't do these things:

  • Form illegal "targeted" business structures such as "pure" or "constitutional" trusts

  • Fail to pay payroll taxes

  • Protest taxes. If you legally comply with tax law, the IRS may call you into an audit, but you have nothing to fear

Fear #6: It's too complicated to keep good records. I could never figure it out!

Fact: We provide the education and tools you need to know to legitimately claim and keep tax deductions. And remember, you can hire experts such as bookkeepers with your before tax dollars to help you keep the records you need.

Fear #7: Getting a tax education is expensive.

Fact: Education isn't expensive--it's not knowing that is expensive. Plus, the money you spend for educational products and seminars is tax deductible.

Fear #8: Taxes are way too complicated for me.

Fact: You can create a powerful team of tax advisers who take care of the details, so you can concentrate on what you do best.

Fear #9: I can't find anyone to trust.

Fact: First, determine what it is you need to feel trust. Sometimes feeling a lack of trust is a good indication of your instinct, and sometimes a feeling of lack of trust in others is because you don't trust yourself. Figure out what is wrong and fix it. Don't let fear stop you from you having all you deserve.

Fear #10: I'd rather pay more and not be audited.

Fact: The amount of tax you pay has nothing to do with your likelihood of being audited. The idea that it does is more wishful thinking . . . and is just plain flat wrong!

About the Author:

diane kennedyDiane Kennedy, the preeminent tax strategist, is owner of Diane Kennedy & Associates, a leading tax strategy and accounting firm that works with clients throughout the US. Diane is the author of The Wall Street Journal and Business Week bestsellers, Loopholes of the Rich and Real Estate Loopholes and co-author of The Insiders Guide To Real Estate Investing Loopholes and The Insiders Guide to Making Money in Real Estate.

A highly sought-after international speaker and educator, Diane has dedicated her career to empowering and educating others about financial investments and the tax advantages that are available.

Through her knowledge and execution of tax loopholes in her business and real estate investments, she and her husband Richard are able to contribute to special life-changing projects and charities in the US and third-world countries.

Diane specializes in teaching investors how to use legal tax loopholes right now to reduce the amount of tax they pay while building their wealth. She offers several home study courses designed to educate and empower real estate investors in tax-advantaged wealth-building techniques.

 
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