Recently released IRS data suggested that the majority of taxpayers in the United States get refunds. For those who end-up owing back taxes every year that may be difficult to accept. Presumably, however, that IRS data refers only to those taxpayers who filed returns. Doesn’t it stand to reason that the majority of filers may be getting refunds because a significant number of the rest of us have unfiled returns due to owing back taxes and we know that we’re never seeing a refund in any shape, form or kind?
The sad truth is, according to IRS attorneys and other tax authorities, too many American taxpayers fall behind and end-up owing back taxes. Others also have years of unfiled returns which haunt them every April 15th and every time another new story hits the wires about the IRS coming down on a delinquent taxpayer. Because deep down they know eventually the IRS will catch-up with them and the penalties and interest will be brutal. So the faster procrastinating taxpayers can get their returns completed and filed, and their back taxes paid, the sooner they can put the nightmare of being hunted down and subjected to horrors like IRS wage garnishments, IRS levies and/or IRS liens behind them.
Tax lawyers warn it’s not only about cleaning up the unfiled returns and back taxes it is also about being proactive and fiscally prudent in managing your tax liabilities going forward to avoid future messes. But everyone agrees, the first step is to clean up the mess!
So where can you start? Well that depends. If you have unfiled returns you should focus on getting those returns completed and filed as quickly as possible, even if you don’t have the money to pay your back taxes. If you want to try to negotiate a settlement with the IRS, you’ll need to have all your unfiled returns completed and filed before the IRS will typically discuss a possible resolution of your tax problem. The reason, according to many tax attorneys, is because the IRS wants to know the nature and scope of your total tax liabilities before considering resolution mechanisms like a payment plan, an offer and compromise, or a hardship.
If you need help, a good tax attorney or other tax professional can help you make an offer and compromise or help get you into a payment plan to pay down the back taxes you owe. They can also help you stop garnishments, IRS levies and/or IRS liens.
But no one can help if you don’t get started!
Segal, Cohen & Landis 9100 Wilshire Blvd. Ste. 601E Beverly Hills, CA 90212 (310) 285-3999