November 28, 2013 | Late Filed Returns
How to file back taxes?
Often, the first question I am asked as a NY Tax Attorney by a client is “Am I in criminal trouble” for not filing my tax returns, and the second question is how to file back taxes?. The first step to resolving this tax issue is to determinate the number of tax years that have back taxes owed. The only way to determine this amount correctly under the income tax law is to prepare the unfiled tax returns using actual data. To do this, tax data is needed for each unfiled tax year. If the income earned during the time period in question is income from an employer, the next step would be to obtain all the prior year wage statements and tax deductions to compute the taxes owed for that year. If the income during the time period was self-employment income, usually the best approach is to first obtain the bank statements for the business income to compute the tax liability, and then gather tax deduction documents to complete the process. Please be aware that over time the tax law changes, so you will need to compute each years tax liability based upon the tax laws in effect for that tax year.
Once, the income tax liability is known. Then, either a payment plan or offer in compromise can be established to resolve the tax debt. Under the tax law, the issue of of how to file back taxes is best handled by contacting the IRS and asking for an extension of time to prepare the tax returns. That way, the risk of a tax levy or tax lien is avoided during this time, and overall it shows cooperation by the taxpayer to deal with the tax problem. Once the income returns are filed, it usually taxes between 8-12 weeks for the IRS to process the returns. This time delay is very useful since it gives us time to develop a strategy with you on how to deal with the issue. For potential criminal issues, it is very rare that unfiled returns, or back taxes owed, cause criminal changes to be filed when the taxpayer files the returns before a criminal investigation is commenced. Therefore, it is always best to act promptly to this issue of back taxes and is a critical component on how to file back taxes. Form my experience as a NY Tax Attorney, This above approach is the best, and answers the main issue of how to file back taxes.
Attorney Timothy Hart
Timothy S Hart, the founding partner of the tax law firm of Timothy S. Hart Law Group, P.C. is both a New York Tax Lawyer & Certified Public Accountant. His area of expertise includes innovative solutions to solve your Internal Revenue Service and New York State tax problems, including tax settlements through the Federal and New York State offer in compromise programs, filing unfiled tax returns, voluntary disclosures, tax audits, and criminal investigations. [ Attorney Bio ]