You moved and lost your records when some of your boxes were mistakenly sent off to the far east; you had a car fire while coming home from the accountant’s office and all of your financial records were burned to a cinder; you just aren’t very good at keeping things, particularly small green pieces of paper that have George Washington’s picture on them; your dog ate it …
Have you heard an excuse yet which explains why you have unfiled returns and now owe back taxes plus penalties and interest? Chances are you are like most of the approximate ten (10) million American taxpayers who fail to file their federal income tax returns each year.
The reasons for unfiled returns range from procrastination to not understanding filing requirements. Many people who have unfiled returns don’t file because they don’t have the money to pay what they owe. A small minority of people intentionally evade their legal obligations to report their income and pay their taxes. These people, like most people with unfiled returns, are living on borrowed time. The IRS will eventually catch up with them and the price for their unfiled returns and back taxes could include an all expense paid trip to an institution selected by the Federal Department of Corrections.
Of course, the vast majority of delinquent taxpayers are honest people who, for whatever reason, just didn’t get those darn tax returns filed and now you owe back taxes and can’t afford to pay what they owe. Well, if you do have unfiled returns and/or owe back taxes don’t despair it may not be as bleak as your nightmares have led you to fear.
The first thing is get you unfiled returns completed and filed whether you can afford to pay the back taxes you owe or not! The IRS will work with you to get your back taxes paid-off, but the government reasonably wants to know everything you might owe before it starts negotiating settlement terms with you. So getting your unfiled returns completed and filed is that first critical step to fixing the problem.
If you can’t do your own tax returns, then get help. There are computer software programs available to help prepare your own returns; there are all types of self-help information available from numerous websites, including the IRS’s; or you can hire a tax return preparer (in fact, for some groups like seniors, you may be able to get reduced return preparation pricing or you may even get your tax return prepared for free). Whatever you do, get the help you need and get those unfiled returns done! After that, you can work with the IRS, or hire a tax lawyer or other tax professional to help you settle any back taxes owing.
Segal, Cohen & Landis 9100 Wilshire Blvd. Ste. 601E Beverly Hills, CA 90212 (310) 285-3999