Overdue Taxes2018-07-26T15:27:39+00:00

Overdue Taxes

overdue taxesIf you have overdue tax returns don’t worry, we can help! It’s not that unusual to get a call from someone who says, “It’s been so long since I filed taxes, I don’t even know how many years are missing! What can I do?” Having unfiled tax returns creates sleepless nights and stress about what the IRS or NCDOR might do. You read or hear stories about the IRS seizing property, closing businesses or affecting social security. Those are extreme circumstances, generally caused by taxpayers not working in good faith with the taxing authorities to resolve their overdue taxes. It’s always better to file the tax returns even if you can’t pay the balance due.

Call me to schedule a no obligation consultation regarding your unfiled taxes. I can answer your questions about the process and help you solve your unfiled tax return problems. I am a CPA serving Raleigh, Knightdale and East Wake County for over 25 years. During that time, I have helped clients file old tax returns and solve tax problems with both the IRS and NCDOR. Tell me about your tax situation and we can work on a plan to get your unfiled tax returns caught up. I can assist with the bookkeeping or organizational help you need to get started. I may be able to get missing tax information from the IRS through “e-Services.” I have a small firm so you will be working directly with me.

If you were due a refund you lose the refund after three years for unfiled returns. If you haven’t filed a tax return the IRS or NCDOR may create a return based on the information they have in their files so they can send you a bill and start the collection process. It’s called an SFR or Substitute for Return. It’s never a good idea to let that happen because the income can be overstated and the deductions or credits understated. The best solution is to get an experienced CPA to prepare your tax returns correctly and file them as soon as possible.

Settle your tax debt for less than the full amount?

The IRS or NCDOR may waive penalties, allow a payment plan or in rare cases settle for less than you owe but before they consider that you must have filed all overdue tax returns. Penalty waivers are generally based on two factors. First Time Penalty Abatement means you have filed all previous returns and have had no penalties for the three years prior to the tax year you are receiving the penalty. Reasonable Cause is based on the facts and circumstances of your situation. Did you have a sound reason for not being able to file your taxes? Sound reasons considered would include, fire, death, serious illness of you or a family member or inability to obtain records.

Don’t fall for the highly advertised tax resolution firms that advertise settling for “pennies on the dollar.” Please read what the Federal Trade Commission says about tax resolution firms https://www.consumer.ftc.gov/articles/0137-tax-relief-companies.

Common reasons for unfiled tax returns:

  • Didn’t have the money to pay
  • Divorce
  • Death or serious illness of a family member
  • Missed the filing deadline and were scared to file late return
  • Fear of what government would do if it was discovered returns had not been filed
  • Business Failure or job loss

Many taxpayers find that the consequences of not filing tax returns aren’t as bad as they thought. Getting started is the hardest part and most people experience relief to be working on the problem.

Why it is important to get caught up on your unfiled tax returns?

  • First, the law requires people to file tax returns if their income meets a minimum amount. There can be many consequences for not filing tax returns and if it gets serious enough, it can be a felony.
  • It can be difficult for people to live a “normal” adult life with unfiled tax returns. It is likely impossible to get a mortgage, refinance a mortgage, get health insurance through healthcare.gov or financial aid for college.
  • It would be extremely difficult to start a business.
  • Lower stress leads to a healthier lifestyle.
  • It may be difficult to get a passport.

Get Help with Unfiled Tax Returns

Call (919) 266-3417 or email rhines@hinescpa.com to schedule a no obligation consultation on solving your unfiled tax return problems. I have the software and experience to get your unfiled returns caught up. If some of your information is missing I am authorized to use IRS “e-Services” to access W-2, 1099 and other transcript information submitted to the IRS by your employer and other third parties. We can provide bookkeeping services if you have a business and need your business accounting caught up.