Filing Back Taxes
Once a year, you are required by law to file your taxes. For some, this may seem like a burden; for others a blessing. Those who are excited for tax time typically see a return from their taxes every year. However, not everyone is in the same financial situation to receive a return; the only way to know is to file your taxes.
In some cases, people end up not filing their taxes, which can lead to penalties and potentially being charged interest. Not filing your taxes can also prevent you from earning a better credit score, due to penalties and interest being charged by the IRS.
Once the IRS is involved and files a substitute for returns, your taxes owed are now being collected through a collection agency. Meaning, the IRS can start collecting the money you owe through your financial accounts. Even when you do not file your taxes, the penalties and interest may be collected through paychecks or bank accounts. Worse case scenario, the IRS can file a federal tax lien; this is the government's legal claim against your property, which means they can now claim your property, including any real estate, personal property, or financial assets. This is why it is vital for you to file taxes, and if you haven’t already, take care of your past taxes immediately.
You can avoid a serious financial crisis by filing your past taxes with the IRS. The easiest way is by going online and filing your taxes with the correct documentation. You may also call IRS services, if this suits your needs better. If you do not have the correct documentation, you can contact the IRS asking for your wage and income transcripts for the required years. These transcripts will provide the information required to file your past taxes. This information is typically gathered using the following IRS Forms:
- Form 5498
- IRA Contribution Information (when applicable)
After filing your past due taxes, you may have a chance of seeing a return, depending upon your wage and other information provided. You should also consider that you may have accrued interest or other penalties on your account, due to not filing your taxes on time. However, if you do end up owing a large amount, there are additional resources that can help you pay this debt. Depending upon your financial situation, there are several tax resolution strategies to assist in repayment, including:
- Penalty Reduction
- Offers in Compromise
- Payment Plans
- Financial Hardship Plans
It is important to remember to file your taxes on time, however should you happen to miss the deadline, it is better to file your taxes late rather than not at all and risk a potential financial crisis. Contact one of our experienced tax attorneys at Foley, Shannon, Powers & Rusch, and let us help to answer your questions and ease the worry un-filed taxes can lead to.