People do not file their taxes for many reasons. The inconvenient reality, however, is that the IRS still requires the filing of late and back taxes even though most of the reasons for doing otherwise are acceptable. To classify, late taxes include those returns that should have been filed for a single year while back taxes are the tax dues dating as early as the mid 1980’s. Doing so will certainly help you lessen and avoid probable problems with the IRS.
There might be occasions when all tax records are not available. This is especially true in cases of fire, flood and other natural calamities when all of a person’s belongings are damaged. The great news is that a tax attorney or an accountant can help in the reconstruction or retracing of a client’s tax records dating as far back as 15 to 20 years ago. These options make the area of back taxes clearer.
A number of circumstances, including simply not having enough funds to settle the amount due on their returns, cause many taxpayers to have accumulated back taxes. But alternatives for filing a missing tax return or back taxes are always available. This move keeps you from potentially paying for a substantial penalty of 25%, which is the fee for late tax returns. Certain states, however, penalize you with larger fees if you fail to file your income tax return.
If you are able to keep all of your tax information from previous years, a great amount of time and effort can be saved. What you just have to do now is prepare your tax returns. It is at this point that many people will see the need for professional assistance in order to avoid further IRS issues. The thought of not knowing whether or not you owe back taxes or knowing that you haven’t paid for this is agonizing. Clients have observed that just making an appointment to meet with a tax professional who can help them sort through the web of forms and procedures makes their worries vaish.
Many people assume that back taxes can be filed through electronic filing methods. This, however, is not acceptable as these requests should be hand-delivered or mailed to the IRS. To have proof that the IRS has received these documents, you must send them using certified mail.
Those who are aware that they owe the IRS any amount of money will be required to pay the applicable interest and fees. In such a case, you can ask the IRS to help you set up a payment plan.
Filing for back taxes can actually be a relatively quick and easy process. What worsens the situation is your refusal to immediately deal with the issue and inaction in filing and paying back taxes. At worst, these IRS issues may cause you to owe substantial amounts of money and face more serious consequences.
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