UNFILED BACK TAX RETURNS
Taxpayers often times fall behind on their tax obligations, and fail to file a back tax return for many years. Our staff is trained to handle the preparation of multiple years’ unfiled tax returns, with or without any records. We have procedures in place whereby we obtain income and expense information for filing late tax returns directly from the IRS, and combine that information with the results of our forensic accounting analysis in order to prepare accurate tax returns, ensuring that you pay no more tax than you rightfully owe.
Failing to file a required late tax return can result in disastrous consequences, including wildly overstated tax liabilities, collection actions such as bank levies and wage garnishments, and sometimes even criminal charges. Many of the negative effects of failing to file your late tax returns can be prevented simply by filing your unfiled back tax returns before enforcement actions are taken against you, even if you don’t pay the tax in full.
If you have unfiled back tax returns, the longer you wait to file, the worse your situation gets, so contact us today to schedule your free consultation. Even if filing your late tax returns will result in a tax liability you cannot afford to pay, it is always better to file the returns. Failing to pay your taxes is not a crime if you do not have the means to pay your tax bill in full. There are numerous options for dealing with collection matters, and, depending on your financial situation, you may never actually have to pay your back taxes. However, the first step in any tax resolution is to file all required tax returns
What Happens if I Don’t File My Back Tax Returns?
If the government has a reason to think you earned any income for a year you had an unfiled tax return, they will file a past due return on your behalf. When the government files your back tax returns for you, they almost always overstating the amount of tax you owe. This is because, when the IRS or State of Michigan files a delinquent tax return on your behalf, they only take into account your estimated income, and do not give you any itemized deductions, exemptions, or tax credits you are entitled to. This method of estimation results in you owing the highest amount of tax possible.
In addition to inflating your back tax debt, the IRS or state will hit you with massive penalties that can double or sometimes even triple the tax on your return. After a back tax return is filed on your behalf, the IRS or State of Michigan will begin to take aggressive collection actions against you unless and until your balance is paid in full or you otherwise address the problem
In the most extreme cases failing to file your delinquent tax returns could result in substantial jail time along with hefty fines and asset forfeitures. Willfully failing to file a tax return is generally a misdemeanor offense, with a maximum jail time of one year. However, when the failure to file returns persists for several years, as is the case with most non-filers, felony charges can be brought and, if convicted, you could be sentenced to several years in prison. However, taxpayers who voluntarily file their unfiled back tax returns before a criminal investigation begins are eligible to take advantage of amnesty programs and avoid all criminal charges
If you are delinquent in your tax filings, generally the best course of action is to file accurate tax returns as soon as possible. By filing your returns as soon as possible, you can minimize, or sometimes even eliminate, the penalties you are charged for the late filings. Also, filing accurate returns will allow you to correct any inflated tax bill you were issued as a result of the IRS or state filing tax returns on your behalf. Furthermore, by filing your returns now, you can usually avoid any criminal charges that you would otherwise have been subjected to for failing to file your past-due tax returns
If you have unfiled tax returns, contact us now to schedule a free consultation with a Michigan tax attorney to discuss your options