This article was provided by Tisha from Backtaxeshelp.com, a site designed to help you with IRS back taxes.
Uh oh! April is almost over. You are cleaning out your desk or filing cabinet and you suddenly realize you didn’t file all of your taxes for the year. Not only that, you failed to turn the documents in on time because you couldn’t afford to pay what you have owed. Having put them to the side, you are now in a panic about what you’ll do and what will happen if the IRS comes calling.
Dealing with current taxes is hard enough but when you find that you haven’t filed your taxes during a certain time period and owe money to the state and federal government, it can be an anxious time. Thoughts of audits, fees, and penalties flood your brain. It can be all-consuming – the constant worry of how you are going to make it all work and how you will possibly be able to afford what you owe plus the extras.
The worse mistake a person can make is not filing a return. Unfortunately what too many people will do is nothing. Doing nothing is what causes the most problems. Believe it or not – the IRS is relatively understanding. You are certainly not the first person to make a tax mistake.
So what can you do after the deadlines have passed and you’re left afraid of what might happen?
Gather Your Tax Information
The first thing you need to do when you realize your mistake is to gather the necessary information in regard to your finances for the year you did not file. You will need your W-2’s, other income statements, mortgage documents, and expenses. If you have lost your information from previous years, you can still contact the IRS and request an income and wage transcript, which will provide you will some of what you are missing.
Complete the Forms
The second step required is filling out the forms. You might be able to use tax software to complete this process or track down the correct forms for the missing year. If you are really at a loss for what to do, consult with a tax profession that can help you prepare accurate tax forms to be submitted.
Assess Your Finances
Once you have completed the forms, if you owe money to the government, you’ll need to assess your situation. Figure out how much of the debt you can afford to pay at the time of filing. You may also require help from a tax profession to discuss tax levies, tax liens, and seizures. If you can pay the full amount, send it in with your tax filings. If you need monthly payment plan, you’ll need to know how much you can pay and what would be necessary in a monthly payment amount to satisfy the debt. Keep in mind that the government may also garnish wages to satisfy tax debts.
Mail In Returns
You need to mail in your tax documents using the US Mail and put documents in separate envelopes for each tax year. Use the Certified/Return Receipt option at the Post Office to ensure a record of the form’s receipt and date it was received. You can not file back taxes electronically.
Follow Up
Follow up with the IRS to determine the balance still due on the account, which will include fees and penalties for late filings. Don’t be afraid to communicate with the IRS office to stay on top of the debt. Request statements to show your payment schedules and balance due when arrangements have been made. Be sure to pay on time each month and devote as much cash as you can manage to paying off the debt as soon as possible. This will keep down the costs of penalty fees being added to your balance. The longer the debt goes on, the larger the penalty costs.
The IRS typically is willing to work with taxpayers to get debts resolved provided the taxpayer stays involved in the process. Sure, they want their money but especially with the current state of the economy the government is aware not everyone has the cash to cough up. The above steps can be handled by any taxpayer at no cost. There are professional services willing to help if you are prepared to pay for their services. Regardless of who is doing the talking, it is imperative you establish communication about the situation right away. The worst thing you can do is try to dodge the debt. If you do not communicate with the IRS and prove you are intent on making restitution, your debt will only grow larger and the penalties will pile up.
Have you ever found yourself filing a late tax return?
{ 2 comments… read them below or add one }
I can’t think of one legitimate reason why anyone would need to file an extension OR file late. There is plenty of time to do this and get it over with.
I can think of one legitimate answer. A Self Employed individual might have lost some important accounting files, say on their computer. The person is new at running a small business, and panics. Good thing there are positive messages on the internet that deal with the subject, like this one. It makes them feel better, and they contact the IRS and solve their problem. I guess people who work at mcdonalds and have all their taxes taken out immediately, wouldn’t have to worry about this article, like yourself.