Jun 25, 2018 in Law

Proper Tax Preparation

As a taxpayer, there are certain things one has to know before they pay taxes and what to expect when their returns have been taxed. It’s important that the filing and preparation of the tax documents need to be clear and precise in order to make the exercise okay.  For instance, there ought to be information on claims and refunds, circumstances under which someone can file a claim, the restrictions on the claims and the duration within which one may apply for the refunds. It’s also necessary that some elements within tax payment are highlighted to enlighten tax payers, an action which can reduce or significantly increase the tax margin (Soled & Goodman, 2010). There are various laws on matters concerning audits and taxes, for example, the United States of America has the Internal Revenue Code which foresees the way the domestic or homeland taxes are handled. Soled &. Goodman (2010) note that this is the authority that regulates all the tax activities that relate to the government and also foresees the penalties that may be imposed on the defaulters of the taxes. Different professional tax preparers advise their clients differently depending on how they perceive the taxation process. On this exercise, the three elements which the tax payers need to understand include the element of disclosure, the element of correct timing and follow up and lastly the element of professionalism.

Taxpayers should take a voluntary and open step to give the correct and accurate information about all their taxable incomes, revenues and assets (Kajan, 2000). This is important as it makes the taxation not only simpler for the authorities to make necessary adjustments when need arises but also generate correct revenues and in turn enable the government to serve the public properly. Disclosure of necessary information also is important to the taxpayer as it makes it possible for him or her to file for refunds tax credits or claims when cases of over taxation occurs. Such disclosures also help tax payers to avoid legal proceedings resulting from withholding important information.  Such legal proceedings can also be very costly. The current tax systems have increasingly been improved and any tax payers who default risks being detained. Some tax laws in some countries such as the America constitution have waivers which encourage the taxpayers to admit past mistakes or information that was deliberately held. Most of the tax payers have a tendency to understate their taxable revenue and assets. Such practices are discouraged by most governments since such tax payers pay less tax than they should at the expense of the government revenue targets. 

Another issue which is closely related to disclosure of correct information is the aspect of filing delinquent or deceptive returns. Disclosure of information require tax payer to state all information which one can default by withholding important information, on the other hand being deceptive involve giving wrong information.

The main role of the taxman is to tax revenues and should not be prevented from taxing the revenues though cases of double taxation do occur. Double taxation occurs when the taxman taxes a given property more that once, due to a deliberate or erroneous act. There are properties that have reportedly been registered under multiple names. Such incidences should be taken into taxpayers considerations to avoid future friction. According to Kajan (2000) the people with errant entries should at least have a pardon to correct the mistakes.

The second element is correct timing and follow up. This involves the law permitting to file their returns. There are durations provided by the authorities within which all the documentation ought to be completed. Fines and other penalties may be imposed to the taxpayers if deadlines are flaunted (McAllister et al, 2008). Also, the time within which the tax information should be returned to the client ought to be in order. Sometimes, a tax return feedback may take too long to be received. This means that there may be omissions that may have occurred that need to be handled urgently. Neglecting such omissions may inconvenience the taxpayers and business especially when it comes to balancing the books of account.

In regard to timing the taxpayer also ought to know the right time to file complaints or tax refunds. Complaints and refunds are inevitable as far as taxing is concerned. These are normally experience when erroneous entries are made during the filing of taxes. The taxpayer should file for transcripts of tax and inquire for the relevant documentation. Various studies have emphasized that it is important that all complainant be file within the next financial or fiscal year to avoid the element of pileup on the cases of tax refunds. It’s also necessary that the authorities have to be followed from time to time in order to finalize the tax or credit refunds. Taxpayers should promptly give out information that may arise during a fiscal year in time for necessary adjustments on the tax activities that are to be done.

Lastly, the issue of professionalism by preparers to show the clients what properties are or aren’t taxable or taxable to avoid inconveniencing the client. In conclusion, tax being the most important source of government revenue; it should be correctly returned, however, there shouldn’t be an overcharge of the tax liability on the citizens.

In sum, tax payers have to understand these elements in order to avoid getting panelized, punished or getting involved in length and costly legal proceedings. Provision of necessary information is necessary in order t avoid delays, over taxation or under taxation.

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