Failure to File Tax Returns     

IRS will not negotiate with you if you have not filed all your tax returns.  

Not filing also provides opportunities to cause yourself a lot of grief outside of owing taxes.  Even if you don't have to file an income tax return because your income is too low, you have to file if you want a refund or earned income credit. 

You can be subjected to criminal investigation for willful failure to file a return or tax evasion.  You will at least be subject to an assessment using the IRS "Substitute for Return" procedure.  What happens here is that IRS figures your taxable income without considering deductions, business expenses or anything else except the standard deduction and one exemption for you then computes the tax on that.  And penalty.  And more penalty.  And interest.  And more interest.  This can yield a liability that is heart stopping!  

If you want to file an offer in compromise, make an payment agreement, get a levy released or if IRS has made a Substitute for Return assessment for a year you didn't file, you must file a correct return first.  I can get income documentation from IRS to prepare them for you.  Missing or lost records can be reconstructed using substitute records or indirect accounting methods.

What if IRS owes you money?  If you have a refund, IRS can't pay it if your return is more than three years late.   Don't blame IRS, it doesn't write the rules.

Don't Lose Your Social Security:  If you are self-employed, your income tax return is where Social Security gets your income to credit to your retirement account.  You lose any social security benefits for income reported three or more years late.  Years down the road, your social security check will be reduced for the rest of your life and you will still owe the tax.  

There can be good news: Some clients who failed to file returns and whose wages were being levied on  ultimately found they were owed refunds.

Let me prepare your missing returns and get you back in the system.  If past years returns had errors, you may be entitled to a refund.  I can prepare correct returns for all open years.  One client of mine had a $750,000 liability reduced to $12.  That is extreme but it didn't happen until returns were prepared.

Return to Index Page

Michael S. Cash, Enrolled Agent
Toll Free Phone (866) 711-9467