Unfiled Tax Returns

New York Tax Attorney offering tax help with unfiled tax returns (aka back tax returns or past due tax returns) for clients who are unable to pay the taxes owed. Let us help you put an end to your tax problems, including wage garnishments, income tax liens, and income tax levies. As an experienced tax attorney, we know how to navigate the system to get the best result for you. 

Once the IRS contacts you regarding your unfiled tax returns (i.e. back tax returns), it is not time to panic and our NY Tax Attorney can help you resolve the issue in an efficient and financially viable manner. In most instances the problems incurred by taxpayers who fail to file their tax returns can be resolved successfully if the taxpayer hires experienced IRS tax attorneys, and addresses the problem in a timely manner. On the other hand, if the taxpayer fails to file their back tax returns and takes no voluntary steps to remedy the issue the penalties for noncompliance can be very severe. In some cases, a taxpayer may even be subject to criminal tax prosecution for failure to file his or her tax returns when a tax is owed. An experienced tax attorney can be very helpful in these circumstances to lower the overall tax bill on your tax return. We have even seen cases where a taxpayer is owed a tax refund that helps offset the years that they owed.

The IRS typically is not going to come to your home, seize all of your assets, or garnish your wages as long as you take immediate action and file accurate tax returns within the time the IRS specifies, and in essence deal with your tax problem head-on. You should always file all of your tax returns on time, even if you do not think you have the ability to pay the tax owed. When you have delinquent tax returns, the amount you owe can go up significantly since there are penalties and interest on the underpayment that is being added to the tax balance. Many times a new client call use when they are in the situation where they just filed an income tax return that has a large balance owed. It is helpful that they filed, since we do not have to deal with trying to get the penalties abated and can concentrate on getting the tax balance down either through an offer in compromise, part-pay installment agreement or a payment plan.

If you do not file, the IRS will file a tax return for you. The reason they do this is that it creates a tax bill for the tax year in question, and then they take steps to enforce the payment of that tax bill. The tax return that they prepare is known as a substitute income tax return (“SFR”). Once they prepare the tax return, they also share it with the State that you live so they can also create a tax bill and start collection activity (liens, levy’s, etc.). Obviously, when these income tax returns are prepared they do not have all the information you have so the tax returns are incorrect since they may be missing that your married or have kids.

The initial steps to resolve the issue of unfiled back tax returns are relatively easy. First, you will need to provide your tax lawyer with your income and expense information, as well as any other documentation, required to complete the tax returns in an accurate manner. Having a tax professional is helpful since there may be legitimate short cuts to produce an accurate tax return. In many cases, our tax clients do not have all the tax data needed to complete the unfiled back tax returns. The method we use to resolve this issue depends on whether the new client was self employed or employed by an employer. In either case, it is not a problem. We have extensive experience with this type of situation, and we are able to request the information from the IRS and other sources to prepare an accurate tax return. In addition to gathering the W2 and Form 1099 data, we analyze whether you entitled to any credits or tax deductions that will help lower your tax bill. We can often negotiate that only the last 6 years need to filed if the period of non-filing is longer than 6 years. Once the overdue tax returns are prepared, you will review them, and then we will submit the unfiled back tax returns to the IRS and State taxing authority on your behalf, and handle all aspects of the negotiations to resolve the tax debt. Our clients are grateful for our hands on approach since there are many complexities involved with these situations, that relying on our  experience makes the most sense.

Therefore, when filing late tax returns, it is important to react quickly and file accurate tax returns by using a tax professional. You also need to follow IRS and State guidelines for “voluntary compliance.” If handled properly, the problem of having unfiled back tax returns can often be resolved successfully with the proper guidance of a Tax attorney who will make sure you are receiving the proper advise. If handled incorrectly, the chance of a criminal prosecution investigation or other enforced collection activity increases substantially. While often these types of issues are viewing as purely financial, once it becomes a criminal case the financial penalties increase greatly. Our tax law firm understands the IRS voluntary compliance program that is available to taxpayers, and we have extensive experience representing non-filers before the IRS and State taxing authorities. If you have not filed all your required tax returns you should act quickly and contact us today to speak to our Tax Attorneys who can assist you and provide the guidance you need. If you fail to act now, the IRS is almost certain to find out that you have not filed the tax returns, and you will face harsher penalties and potentially criminal sanctions than if you voluntarily complied with our assistance with your unfiled income tax returns.

Here are some items that are useful to gather if you have unfiled tax returns. 1) Any recent notices you received from the IRS, 2) W2 and Form 1099 forms, 3) A summary of your deductions (real estate taxes, business expenses), 4) an idea of the last year filed. 

UNFILED BACK TAX RETURNS – Details of the IRS Voluntary Compliance Program

In many instances, when a taxpayer seeks to correct the problem of the unfiled back tax returns before the IRS investigates the matter, it is possible to utilize the IRS’s “voluntary disclosure” policy to file the unfiled back tax returns, and avoid criminal prosecution in almost all cases. In connection with the IRS voluntary compliance program, the taxpayer and his or her representative must be very careful to file returns that are accurate and complete. If the IRS determines that a late-filed return is inaccurate or incomplete, the chances of triggering a criminal prosecution investigation increase greatly.

The long standing IRS’s voluntary disclosure policy applies to a taxpayer who:

  • Voluntarily informs the IRS of his or her failure to file for one or more years.
  • Makes the disclosure prior to being informed that he or she is under criminal investigation.
  • Files a correct tax return, or cooperates with the IRS in ascertaining his or her correct tax liability.
  • Makes full payment of the amount of the taxes due, or if unable to do so makes an agreement to pay the taxes owed over time.

Attorney Client Privilege

Taxpayers who have not filed their individual or business tax returns often begin seeking help by contacting their past accountant. However, please be aware that Federal and often state laws recognize only a limited accountant-client privilege concerning confidential communications. Therefore, when you have an unfiled tax return, it is best to seek out a tax lawyer to assist you. Having a tax problem should not be an embarrassment, and be being active and tackling the tax issue it will get better. Most unfiled tax return issues involve an income tax return, but it can also involve sales and payroll tax forms.

The legal privilege or confidentiality rules involving communications between a client and their accountant apply to civil tax disputes, but they do not apply to criminal cases. Therefore, only the attorney-client privilege will protect your communications with the tax professionals you hire where there is state or federal criminal tax investigation or prosecution for unfiled back tax returns. Since this privilege is a vital component of the defense of a taxpayer with unfiled returns (or unpaid taxes), it is important to first talk to a tax attorney if you think that you may be subject to a criminal investigation.

By: Timothy S. Hart

We Can Help You No Matter Where You Live.

Our New York tax law firm offices are located in New York State but we are able to help you in any state across the country. We can work with you no matter where you live. Mr. Hart is licensed to deal with the IRS in every state in the entire country.