The only problem is that I can't find those receipts -- am I going to go to jail? These were all cash-paid items and the store can't retrieve them either.
I really don't want to get into trouble with the IRS and will pay additional tax and penalty if I have to. I just don't want to go to jail for this dumb thing. The deductions in question were about $7K and I made $30K last year.
Please Help
2007-12-25 09:34:38 · 5 answers · asked by alexwitnerss 1 in Business & Finance ➔ Taxes ➔ United States
You aren't going to jail. About the worst that will happen is that the auditor will disallow the deductions and you'll have to pay the extra tax, penalty and interest. If you can show by some other means than receipts that you actually did buy the items in question, then they might even allow them.
2007-12-25 09:41:00 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
The difference between $7K and standard deduction for a single person is peanuts. The worst thing that will happen is you owe more money. Try and think how you can reconstruct those records (that doesn't mean recreate.) If you made charitable contributions, for example, contact the charity and see if you can get a duplicate receipt.
2007-12-25 19:40:35 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You will not be going to Jail, so relax, find your receipts and show IRS proof. IF you can't locate them then call IRS at the number they provided in your letter and work something out. If you owe then make payment arrangements. But don't just ignore it.
When you file your tax return this year and if you owe IRS any money, it will be offset to the balance due.
Good luck in finding your receipts.
But you will not be going to jail.
2007-12-25 19:28:34 · answer #3 · answered by Ms. Angel.. 7 · 0⤊ 0⤋
I agree the odds are these will be disallowed until you can produce those receipts.
This is one of the reasons I pay by check or credit card--more documentation, but I also store all tax deductible items *with* my tax records and I do not claim them if I can't find them.
Wow, this is going to be costly. Every dollar of income will not only have income tax, but 14% of SE Tax as well.
2007-12-25 17:49:13 · answer #4 · answered by Anonymous · 1⤊ 0⤋
If you can not provide the receipts then you can not prove your deductions. You will not be going to jail. You will be paying additional taxes, fines, penalties and interest.
2007-12-25 18:07:34 · answer #5 · answered by Gary 5 · 1⤊ 0⤋