There are many reasons as to why you may have unfiled tax returns.
We understand that life gets in the way.
However, it's not a question of "IF" the IRS or the ruthless NY Tax Department will come knocking on your door.
It is a question of "WHEN".
Now is the best time to get back to where you should be with the help of a professional who does this day in and day out.
Here are the most common reasons I hear on a daily basis as to why income tax returns don't get filed when they are supposed to. :
- You're fearful that the IRS or NY Tax Department will investigate you, and possibly put you in jail.
- It becomes overwhelming as 1 year turned into 3 ... and now it's 10 years since you last filed ( the record in our office is 25 years ).
- You don't know where to start.
- You knew that you would owe money so you didn't file.
- You lost your records.
- You got divorced.
- Your accountant was terrible.
So, read this article and then contact us to put your tax problems behind you. We can assist you regardless of location.
Your Questions About Unfiled Tax Returns
If you have unfiled IRS or New York State tax returns, there are a number of questions probably running through your mind such as:
Am I going to go to jail?
I don't know where to start ?
Who can and should help me ?
How can I finally get my life back on track ?
IRS Tax Laws
As a general rule, Internal Revenue Manual 1.2.14.1.18 and IRS Policy Statement 5-133 states the IRS will require you to file the last 6 years of tax returns in order for you to be deemed compliant.
New York Tax Laws
New York State does not have the same laws and rules and may require us to file more than 6 years of income tax returns.
So, how many years of tax returns should you file?
There is no cookie cutter answer.
For example, in certain circumstances, we may want to file income tax returns even if the IRS or the New York State Department is NOT requiring that you file the past due years.
Why would you want to do that?
A common scenario with unfiled tax returns is that the IRS or New York State is preparing the income tax returns ( on your behalf) so that the taxing authority can assess and more importantly, collect the tax from you.
IRS Substitute for Returns & NYS Assessments
When the IRS or New York State prepares an income tax return for you, you are not being given any deductions or allowable expenses.
Therefore, the amount of tax, interest, and penalties that you owe are often inflated.
For example. we had a taxpayer who owed $60,000 in taxes.
We reviewed the tax files, applied the tax law, and determined that it would be beneficial for this person to submit income tax returns to replace the returns prepared by the IRS and State.
We prepared the past due income tax returns; ensured that they were accepted; and saved our client over $50,000 in taxes, penalties, and interest.
Don't Make a Mistake
However, you DON'T want to make a mistake and file all your past due tax returns without the correct game plan.
For example, we had a small business owner come to us after his accountant filed all of the past due income tax returns on his behalf.
After we reviewed the tax files, we had to advise the client that the accountant made an irreversible mistake.
The accountant filed a tax return that he should not have filed.
How much did the accountant's mistake cost the client? $150,000!
Most accountants and CPAs don't specialize in these type of matters.
If an experienced accountant or CPA can make a mistake, what kind of mistake can someone with no experience in tax controversy ( like yourself ) make?
Protect Yourself from the NYS Tax Department
The New York Tax Department aggressively pursues non-filer and back tax matters.
For what we have seen, NY is even more aggressive that the Internal Revenue Service.
When determining how to handle your unfiled IRS and NYS tax returns, the federal as well as NY tax laws must be taken into account because the New York the Department of Taxation and Finance has specific laws that govern non-filer issues and unfiled tax returns.
To date, we have protected all of our clients from federal as well as NY criminal prosecution.
Through our tax problem solving process, we have saved our clients tens of thousands of dollars in penalties.
Mistakes with unfiled taxes can cost you in many ways.
For example, we had a client come to us after she had filed 5 years of unfiled taxes with the IRS and NYS.
After we filed a power of attorney with NYS, we had to sadly inform her that she would have been able to save over $15,000 in penalties had she done the proper paperwork before filing her back taxes.
Mistakes can be the difference in saving a substantial amount of money.
Failing to file a tax return is a crime
The willful failure to file a tax return is a misdemeanor that will result in a maximum sentence of one year in prison for each tax year that was not filed.
Also, tax evasion is a felony carrying a maximum sentence of five years in prison for each tax year.
Now, before you run out the door or hide you head back in the sand, understand that the criminal prosecution for unfiled tax returns can be avoided with the proper guidance of an experienced tax attorney.
We have protected all of our clients from criminal prosecution.
What if I don’t file?
The IRS or New York State Tax Department may pursue you from a criminal standpoint.
New York State is highly aggressive when it comes to non-filer cases and your chances of criminal prosecution increases with certain types of state tax issues.
If the IRS or the State does not pursue you from a criminal standpoint, they will continue to pursue you for the purposes of civil enforcement.
Just because you may not have heard from the IRS or NY taxing authority in a while, it does NOT mean that they have forgotten about your back taxes.
At the very least, you will be subject to a tax lien, wage garnishment, and/or bank levy when the taxing authority finds out where you work or do your banking.
Financial institutions and employers are legally required to report the IRS.
Therefore, it is only a matter of time before the IRS or State finds out where you work or bank.
Once you get to retirement age, the IRS can garnish your Social Security as well as your retirement distributions as a result of your back taxes.
How to file back taxes without records
It is overwhelming but we can help. If you lost your tax records, we can obtain your records from the IRS.
When you work for a company; are paid a commission; or a bank pays you interest, the employer or financial institution is required to send that information to the IRS.
We can obtain that information for you and not flag the IRS or NYS.
As part of our process, we check the income reported on your wage and income transcripts against your own records for each tax year that we are required to file to ensure that the income tax returns are prepared correctly.
We can guide you through the process of getting a number of unfiled tax returns filed, step by step.
When numerous years of unfiled tax returns are filed, they are going to undergo additional scrutiny by the IRS and Department of Taxation and Finance so it is important that the past due income tax returns are prepared by a firm experienced in non-filer matters.
Solving issues related related to unfiled taxes is one of our primary areas of expertise.
Will the IRS & NY forget about me?
NEVER. There is NO statute of limitations ( period of time) on collecting back taxes on unfiled tax returns. The problem will never go away on it's own!
What about my refund?
If you are entitled to a tax refund, you must file your unfiled tax returns.
You may be eligible to receive a refund for the last 3 years, even if you have unfiled tax returns.
And, you will receive the interest on that refund as well.
If you fail to file your back tax returns, you may lose your right to obtain those refunds as the IRS has a three year statute of limitations on the right to obtain refunds for previously unfiled tax returns.
In certain cases, we have able to obtain get our clients refunds. Those refunds were often used to offset some of he back taxes owed for the older years, saving our clients thousands of dollars.
NY & IRS tax laws are different [beware]
NY and IRS tax laws are different when it comes to the filing of your unfiled tax returns.
For example, the IRS and New York State have different filing requirements.
Also, different strategies apply to help you solve your non-filer tax problem in New York. We often see clients come to us after they either a mistake or their accountant made a mistake by applying the federal law to their New York tax problems.
I haven't filed taxes in 3 years, 6 years,10 years
To get the possible results with your IRS and New York State non-filer matter, you need to hire a tax attorney HIGHLY experienced in both IRS and New York State tax problem matters. Take the first step today
Why you must stop procrastinating
- You will always looking over your shoulder, waiting for the IRS or NY tax agent to show up at your door.
- You will wake one morning to a threatening letter from the IRS or NY Tax Department.
- Not filing a federal or NY tax return can be felony.
- Will you be the next person that the IRS or NY Tax Department will make an example of ?
- Forget about buying or refinancing your a home without tax returns.
- If NY claims you owe over $10,000 due to unfiled taxes, your driver's license will be revoked. If you get pulled over, you will get arrested.
- Your passport may not get issued or in certain circumstances, revoked.
- If you are self employed, getting health insurance on a health insurance exchange or higher Social Security when you retire will not happen.
- If you are looking to get your citizenship, proof of tax return filings are usually required.
- To reduce your anxiety and have peace of mind.
How We Can Help You
- Unlike most accountants or tax attorneys, we routinely handle IRS and NYS non-filer matters, like yours, on a daily basis.
- We will ensure that we set up the best strategy to protect you and save you money from the beginning.
- Experienced tax attorney Charles Rosselli will take over all written and verbal communication with both the IRS and New York State on your behalf so you never have to speak or meet with them.
- We can handle the entire process with the IRS and NYS from beginning to end (non filer representation from tax preparation through resolution).
