It is tax time again. Numerous Massachusetts residents may anticipate refunds while others expect to pay. In either case, filings need to be made, and many people turn to others for help in maximizing refunds and minimizing payments. The problem is innocent people could end up paying for taxes filed incorrectly because they unknowingly became the victims of scammers.
For some Massachusetts residents, earning enough money to live on can present a challenge. For this reason, the state, like the federal government, provides eligible taxpayers with the opportunity to take advantage of certain tax breaks, including the earned income tax credit. However, if filers are not careful, they could risk tax audits through misuse or mistaken use of this option.
The IRS wants the money it believes people here in Massachusetts and elsewhere owe. The agency will conduct investigations when its agents suspect that an individual or business failed to pay any amounts owed. Depending on the results of the investigation, agents will make accusations of tax evasion and other crimes against taxpayers.
The Internal Revenue Service (IRS) requires taxpayers to report certain foreign assets. In most cases, the first required step involves checking a box to acknowledge the ownership of such assets on the Form 1040 tax return — but this is only the beginning. In some cases, the agency requires taxpayers file additional forms.
With the technology available today, keeping records may not seem as difficult as it did in the past when most things were on paper. However, that does not always resolve the issue of how long Massachusetts taxpayers should retain their tax records. When it comes to taxes and statute of limitations, how long the paperwork should be kept largely depends on the information, but a good rule of thumb would be to keep relevant tax paperwork, including prior returns, as long as possible.