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What is the IRS?

In the United States, the Internal Revenue Service (IRS) is in charge of tax collection. This instance is responsible for fiscal management, as well as compliance with the tax laws of the country. It is part of the Department of the Treasury and has powers such as the administration of the Internal Tax Code and the application of federal tax laws.

The IRS might not seem like a fascinating topic, but it can be difficult to understand just how complex the tax rules are. For example, we all know that taxes are only due when you make a taxable sale. However, there is a whole other set of rules that relate to the situations where you have to claim deductions. If something happens and your deductions are in jeopardy, it’s a good idea to take a look at the IRS website.

Introduction

The IRS is a federal agency that administers the Internal Revenue Code (IRC). The IRS was created in 1913 to collect and distribute federal revenues. It was given the responsibility of collecting and distributing tax revenue, and to carry out a variety of functions that directly affect individuals and businesses. The IRS has been extremely instrumental in keeping tax revenue flowing to the US Treasury since its founding.

The Internal Revenue Service (IRS) is the US government’s tax collection agency. It is one of the largest revenue-producing organizations of the government and represents more than 20 percent of all revenue collected by the federal government. The IRS plays a vital role in building an economy, effectively collecting taxes on a national scale and enforcing the laws on both personal and business tax obligations.

How does the IRS work?

Federal taxes are a tax liability for businesses and most American citizens, especially the working population. In this sense, every natural or legal person that generates income must pay on their taxes received during the fiscal year.

The tax filing and payment process for natural persons normally ends on April 15. To do this, you must have the taxpayer’s identification number and all the documents related to the tax return. If you do not have the taxpayer identification number, you can use the IRS Personal Taxpayer Identification Number (ITIN).

How to pay your taxes in the United States?

Currently, you can pay your taxes by making an electronic transfer to the IRS from your bank account. In addition, it is possible to use your debit or credit card. Similarly, you have other methods that include making a bank transfer on the day you file your return electronically.

If you do not have electronic means to make your payment, you can use other alternative methods. First, you have the option of sending a personal check, cashier’s check, or money order by mail. The same must be made in the name of “US Treasury”, additionally it is necessary to include the following information:

  • Names and address.
  • Phone number.
  • Social Security number or employer identification number.
  • Fiscal year.
  • Related tax form or notice number.

On the other hand, if you wish to pay in cash, it will be necessary to request an appointment in person at an IRS Taxpayer Assistance Center. To do this, you can call the number: (844) 545 5640. In this line, it is important to keep in mind that you must request this appointment between 30 and 60 days before your estimated date to pay.

Finally, if it is a company, legal entity or requires a large payment, you must use the Electronic Tax Payment System. However, to use this service it is necessary to be previously register.

How do you know if the IRS is going to do an audit?

As part of the functions of the IRS, this entity applies an audit to a select part of the income tax returns made each year. The purpose of this process is to verify the veracity of the information provided by the taxpayers. As stipulated by the tax laws, where the amount of taxes declared must be exact. The reasons why the Internal Revenue Service conducts an audit may vary from case to case. However, it is frequent that it is carry out when the taxpayer declares a higher income compared to previous periods.

However, it is common for said entity to apply a tax review to natural persons who run their own business. This may be due, perhaps, to the variation in income that the frequent economic activities in these occupations tend to present. On the other hand, the signs for an audit increase if the taxpayer does not report the correct amount of income. Likewise, cases are examine where a higher than normal amount of deductions is claimed. Likewise, disproportionate contributions to donations or charitable works are studied.

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