Late or Unfiled Tax Returns
Late Tax Returns
Filing late or past due returns may not be as difficult as you think.
■If you need additional time, we can usually help you get an extension of time to file or temporarily suspend collection activities.
■ If you can’t afford to pay your taxes, we can help negotiate a payment plan that you can live with;
■ If you have lost or misplaced your tax information, we can get much of this information for you;
We can help prepare the late returns, obtain favorable payment options and get your life back on track!
Why You Should File Late or Unfiled Tax Returns
Taxpayers should generally file all tax returns that are due, regardless of whether or not full payment can be made with the return for a variety of reasons.
First, failing to file a tax return will often result in a failure-to-file penalty. Filing a late return may help to reduce your tax penalties even if you cannot pay the taxes owed.
Second, the collection period in which the IRS can collect taxes on your return is limited. By filing a late return, you may are limiting the time period in which the IRS can collect taxes. Failure to file your return extends the collection period indefinitely.
Third, you may be entitled to refunds. Even if you owe taxes for some years, you may be due refunds for others. Your time to receive refunds, or apply overpayment from some years to others in which taxes are owed is limited. Don’t let this happen to you! Get your refunds or tax credits before its too late!
What Happens When You Don’t File Your Return
If you don’t file, the first step the IRS will take is to determine whether or not you need to file and what taxes may be due. You may not need to file a tax return if your total income is less than the minimum amount required to file a return or the income you earned is of a character in which tax filings are not required.
Once the IRS determines that you need to file a return and that taxes may be owed, the IRS may send you a friendly reminder notice that your tax return has not been received and request you file your return as soon as possible. Once you receive this letter, the chances are pretty good that the problem is not going to go away. If you moved, never received or never opened the letter – this does not help you.
You are still obligated to file. Don’t ignore these letters any longer – let us represent you!
If the IRS determines that you have not filed your tax returns and it appears that you owe taxes, the IRS may prepare a return for you (substitute for return) and hold you liable for the taxes owed. Unfortunately, the amount determined by the IRS is usually MORE than the taxes you really owe because the information used by the IRS is limited. Don’t let the IRS do this! Prepare your return with us and let’s get all the tax benefits and deductions your are entitled to.
Once the IRS determines you owe taxes, the IRS will begin its collection enforcement of these taxes. This may include levying your bank accounts, levying your wages, recording federal tax liens, etc. This is not where you want to be! Whatever circumstances apply, it is important that you take steps to file your tax returns now (even if you owe money that you cannot pay). The filing of your tax returns can help reduce penalties that may apply. Furthermore, filing your returns and acknowledging your debt may eliminate the filing of a tax lien by the IRS thereby hurting your credit and amounts you may need to borrow. Don’t let this happen to you. Once the collection process begins it becomes more and more difficult to stop it. Let us represent you!
How to Prepare and File Late Tax Returns
Our procedures for filing late tax returns are very similar to the procedures we use in filing your tax returns on time with one important exception. Our IRS representation services will almost always include:
• contacting the IRS to acknowledge your tax filing delinquency and informing them of your efforts to comply,
• requesting temporary relief from ongoing collection efforts to allow additional time to prepare your returns;
• gathering information from the IRS regarding what may be owed, what penalties and interest may have been assessed already;
• gathering information from the IRS on what sources of income and deductions have been reported;
• recalculating penalties and interest and helping you to abate these amounts wherever applicable
Paying Taxes Late
Whether paying with a timely filed tax return, or filing late and paying late after receiving a bill from the IRS, taxpayers are encouraged to pay the taxes they owe in full. If taxes are not paid, and no effort is made to pay them, the IRS can ask a taxpayer to take action to pay the taxes, such as selling or mortgaging any assets owned or getting a loan. If no effort is made to pay the bill, or make other payment arrangements, the IRS could also take more serious enforced tax collection action, such as levying bank accounts, wages, or other income, or taking other assets.
Once the total tax liability is determined, we explore the various payment options that may be available to you. There are generally four options available:
1. Pay your tax liabilities in full;
2. Pay the full amount of your taxes owed over time;
3. Pay less than the full amount of your taxes;
4. Make no payments until some future date in which you may do any of the above
Whatever circumstances may apply, we can help you negotiate a payment agreement that you can live with to help you get back on track.