
SUBSTITUTE
RETURNS
FILING BACK TAXES LATE
STATUTORY
PROVISIONS
LOST
DOCUMENTS
PRIVACY POLICIES
While the
primary focus of this discussion is related to IRS
back tax returns there are comparable State statutes
and this discussion is therefore equally applicable to
your State back taxes, late penalties and
interest.
Some
of our clients have not filed returns for a year or two others have not filed taxes
for 10 years,
or more. No matter how far behind you are our Accountants and Enrolled Agents
will postpone collection activities, retrieve lost
documentation from State and IRS databases, banks and
others and use audit techniques to prepare a reasonably accurate
return that will be
accepted by authorities.
There
is no statute of limitations associated with the
assessment or collection of back taxes, late penalties or interest
on returns that have not been filed. In
addition, the IRS will
not issue a refund or apply an overpayment to offset
the late taxes of another year if a return is
not filed the later of, three years from the due date
of the return or two years from the time the taxes are
paid. In essence, any refunds and offsets that
you may have been entitled to receive are forfeited to the
IRS if you do not
file a return by the statutory time
prescribed.
The
late tax liability determined on a substitute return is based on the income reported
to authorities less one personal exemption and a standard
deduction but ignores exemptions, credits, deductions,
losses and expenses that you may be entitled to claim
to reduce the back taxes, late penalties and
interest.
As
a consequence, a substitute return essentially computes an alleged
back liability that is rarely correct and the vast
majority that file back tax returns are amazed to find out how insignificant
their problem really was or how easy the problem was
to resolve after taking action to settle their back taxes. The following example is not an
an aberration or uncommon occurrence when late returns are filed.
Though
rarely enforced, Internal
Revenue Code (IRC) § 7203 provides authority for the
government to charge an individual with a misdemeanor
when there is a willfull failure to file back taxes
and/or failure to pay late taxes and IRC § 7201
provides authority for the government to charge an
individual with felony evasion when an individual does
not submit a late return with the intent to conceal income
and avoid assessment or payment of taxes.
Thank
you,

McCall,
ID
Our
organizational privacy
and security policies guarantee that "only"
contact initiated by you and required to prepare late tax returns and settle your back
taxes will occur at any time, now or
in the future.
I
thought I had big problems and did not file for several years because I felt overwhelmed by both
the process and the amount that State and Federal
officials said I owed. Your staff was courteous,
knowledgeable and promptly answered my questions. You
prepared my returns, substantially reduced the late
interest and penalties, used refunds to pay back tax liabilities and I received checks that totaled $2,971.00.
The
IRS reconciles W2, 1099 and K-1 earnings reported to
them by employers, banks and others against the
taxpayer's social security number to monitor filing
compliance and utilizes its statutory authority under IRC §
6020(b) to prepare a return for you commonly
called a substitute return when an individual fails to
file.
Note:
Statutes of limitation for refunds vary from State to
State.
©
Copyright 2001 - 2008 Hans and Roush, Inc.
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