For the past few weeks my usual stack of junk mail has been supplemented with a steady stream of 2001 tax statements and forms, reminding me that the clock has begun ticking towards April 15. I admit that even though my taxes are relatively simple and I took a tax course in law school, I still hire an accountant to complete the forms. I found law school discussions concerning the concept of “basis” or “stepped-up basis” to be about as easy to follow as the rule against perpetuities.
Of course, the one tax concept that we all understand is an audit. The prospect of being audited may be one of life’s most stressful experiences, so I can only imagine how daunting it would be if I had to do so without any professional assistance. But that is the exact situation that many low- and moderate-income taxpayers face when being audited by the Internal Revenue Service. With the push in recent years to move people from welfare to work, there are many new low-wage first-time filers, who are often automatically audited. Still others fail to file, file incorrectly or fail to take advantage of programs like the Earned Income Tax Credit.
