Filing back taxes will likely be a bit difficult and to ensure it is done properly there are a few guidelines you should follow. You have taken the initial step towards resolving your unfiled back taxes just by reading about it. If you do not file, you will continue to experience many IRS problems. People who think the Internal Revenue Service won’t figure out they did not file, they are wrong. Ignoring the IRS or failing to file unfiled returns will lead to the IRS taking forced collection actions against you.

Gather Documentation
Obtain copies and relevant documentation in preparation to fill out tax returns. If you fail to complete a tax return, the Internal Revenue Service will complete a “Substitute Return” which will count as tax returns for the years not filed.. If the IRS has submitted a return under your name, you will need to amend their return with the assistance of a tax professional to lower your tax bill. Their Substitute Return tax return is not advised because they will not give you any deductions which will end up in you owing more taxes. If you don’t have relevant paper work, it is good to contact the IRS or your employer or former employer to try to obtain relevant tax information. To file or amend a filing you need W-2’s as well as other documents supporting any deductions you claim. IRS form 4852 can be used to substitute W-2’s if you cannot obtain from the IRS or employers.

Contact and Hire a Tax Firm
Once you have all the tax filing information needed or you need assistance acquiring the tax documents, contact a BBB certified tax firm. When contacting a tax expert it is best to work with a tax relief firm that can file tax returns for you AND help settle taxes owed. Otherwise, the process becomes delayed and you will usually not obtain the best outcome because the services are being broken out between two firms.

Get the Tax Company you are Working with to File Back Taxes
You only have to prepare back tax returns for the last seven years. Your tax expert will contact the IRS to let them know you will be filing back taxes. Once the returns are filed, you will be back into normal standing with the Internal Revenue Service. There will be fees from using a tax professional but overall these charges are worth it because of the savings and the confidence things were done correctly. After you file your tax returns you will know how much you owe the IRS.

Know your Options when it Comes to Paying your Tax Debts
Next if you can’t pay the tax amount owed to the IRS immediately, then you can work with your tax negotiation firm to find the best way for you to reduce and settle tax amounts owed to the IRS. In some cases, you can submit an Offer In Compromise (OIC), however, this option is only available if the IRS is unsure your liabilities are correct, or they don’t think you can pay–it is rare to get an Offer in Compromise approved. If your tax professional feels there is no way to reduce your tax debt, and you can’t pay the total sum immediately, then you can request a PPIA (Partial Payment Installment Agreement). PPIAs come usually in a 60 month payoff term. If you owe more than twenty five thousand dollars, you will have to submit IRS form 433F (Collection Information Statement) , and IRS Form 9465 on your behalf.

Tag: