What happens when you’ve been hiding underground from the IRS and you want to peak your head out of the hole?
You’re not even sure when you last filed a Tax Return, let alone know what the first step you should take.
We’ve learned that most of the Clients we’ve worked with have one thing in common: They want to move past this and get on with their lives!
It’s not uncommon for people with unfiled back tax returns to pay fees at check cashing establishments because they’re afraid to have a bank account, as the IRS or State Taxing Authority might direct levy money from their account.
No one plans on being in this situation; you failed to file one year and then continued not to file, and now the whole situation has turned into an avalanche.
Perhaps you’re worried because you haven’t filed back tax returns in a while, but somehow, you’ve flown under the radar, yet you know that won’t last forever.
In many cases, we see that Taxpayers do not fill out the proper forms to notify the IRS of a change of address with IRS Form 8822 – Individual / Estate or with IRS Form 8822-B change of address or responsible party – Business. The IRS has been sending letters, but they don’t have your current address. While no one goes to jail for failing to pay Taxes, if the IRS can prove your refusal to file was done with criminal intent, you could face charges of Tax Fraud. If you haven’t filed and are unresponsive to the letters that the IRS has been sending, the Internal Revenue Code §6020(b) gives the IRS the authority to prepare those tax returns on the taxpayer’s behalf. The IRS refers to it as a Substitute for Return (SFR) and if you fail to respond to the SFR notice within 30 days, the Tax Return the IRS prepared for you is filed and collections start immediately. This can lead to a Federal Tax Lien giving the government a claim against your current and future assets and property, or a IRS Tax Levy giving the IRS the right to legally seize your assets, or garnish your wages.
It’s imperative to understand that when you don’t file your Tax Return(s) for a given year or years, the statute remains open and the IRS can file Substitute for Returns (SFRs) and start collections. The ten (10) year statute will start from the date they assess the tax on the Substitute for Return (SFR), and not from the particular year of the Return. The important issue to understand regarding an SFR is they are rarely accurate. For example, let’s say you own a home and can itemize your deductions on your Tax Return, yet the IRS will file the SFR with the standard deduction and not your itemized deductions.
One of the most common reasons an SFR is filed, is when you have business income from being self-employed on a 1099. The IRS will file the SFR and will not account for any business deductions to offset the income reported on the 1099. This increases your self-employment tax and your self-employment tax being 15.3% of net profit from the business income, plus owing income tax penalties and interest. Your taxes owed will be substantially more than if you filed them on-time each year.
Just because an SFR has been filed does not mean you are stuck paying the taxes you owe on their Return. You can file your Tax Return(s) and get the taxes owed, reduced, if the IRS accepts your Tax Return. We know this can be difficult, especially if you don’t have any tax documents from the tax year the IRS has filed a Substitute for Return (SFR). The good news is that you can get wage and income transcripts from the IRS which will show what Information Returns were filed with the IRS. This will have all the W-2, 1099, 1098, and 5498 forms showing your income for the particular tax year(s).
It seems like a lot, and you’ll never get out of the MESS by ignoring it!
Yet facing the problem(s) you’ve created will be one of the best choices you make!
So then, you can live free from the sleepless nights caused by worrying about your IRS Taxes.
Do you have back tax years that have yet to be filed?
If YES, then let’s stop the AVALANCHE of TAXES and INTEREST!
We’ll get them filed so you can have peace-of-mind and live your life NOT in fear of wage garnishments, liens or levy’s. THEY ARE UGLY!
Getting caught up does NOT have to be.
Call Jason Valiante today for a free consultation!
IRS Enrolled Agent
Office: 714-710-3424
Email: Jason@valianteTFM.com
www.valianteTFM.com
