I failed to file returns for a few years although deductions were made each month towards taxes.?
I had some medical problems and let things go and when I finally got things in hand didn’t know how to fix things so I neglected correcting them longer….I finally filed and had over $17,000 in refunds owed me, but the IRS penalized me for not filing and want me to pay penalties and interest besides keeping my refunds and all the other breaks given that year. I don’t know how to pay what they want since I’m retired and live on a pension that doesn’t give me much money after my living expenses.(less so with the economy at present). Contacted an attorney who wanted $4,000 to help me, but I don’t have $4,000 and if I did I’d put it to my tax bill!. Can I file a compromise myself? I NEED DIRECTION and FAST!!! This is causing me extreme amounts of stress and many sleepless nights…with thoughts of becoming homeless. I don’t own a home, don’t have any assets, just my monthly pension……
,,What is the best way to file back taxes and how do I get copies of my W-2 and tax returns from 2002 to present ,In 2008, I had to file several years of back taxes. Can I write off preparation fees for those years? ,Tax Return Question! Did I need to file returns for previous years even if I was unemployed in college? ,What is the process of tax refun via e-file for me since I have back taxes due from 2 years ago? ,Do federal or state tax refunds count as income if I file my returns too late? ,Tags: although, Deductions, Each, Failed, file, made, month, returns, taxes, towards, were, years
Comments (6)
Don’t go to an attorney.
Go to an Enrolled Agent. Much cheaper and has only a tax focus.
http://www.naea.org/memberportal/Resources/ForTaxpayers/whatis_EA.htm
You clearly need someone to review your situation. You say you should have had refunds and the IRS says you owe. If you were getting paid on a W-2 and had enough taxes withheld, you wouldn’t be paying interest and penalties on a refund.
The statute for claiming a refund is 3 years.
The statute on unfiled tax returns where you owe is forever.
Don’t go to a lawyer. The reason they want $4,000 up front is because they know your chances are slim of having an OIC (offer in compromise) approved, and they also know that once you see how lousy their customer service is, you won’t want to pay them.
Contact an enrolled agent (EA). They specialize ONLY in tax issues like the ones you describe and they are much cheaper and easier to work with. They may still demand some money up front, but not nearly $4,000.
Based on the info you provided, something isn’t adding up.
If you were due to get refunds, then there should be no penalty for filling late and there should be no interest or late payment penalties. Its now too late to claim refunds from tax years 2005 and earlier, but you should still be able to claim them for tax years 2006 and later. The statute of limitations to claim a tax refund is 3 years from the original filing deadline. That means that 2005 taxes were due on April 15th 2006, so the last day to claim a refund was April 15th 2009.
Unfortunately any refund money from 2005 or earlier is completely gone. If you were due a refund during those years, but owed money from 2006 and later, then you will in fact have to pay the debt. But, any refund from 2006 or later should apply to any debt you owe, as long as you file your returns before the 3 year deadline.
If the IRS audited you and took away deductions, then you will really benefit from consulting an EA. An EA can help you by telling you what sort of proof you need to show the IRS that you really did qualify for deductions, etc. If you can get the IRS to reinstate legitimate deductions, it might turn a debt into a refund.
Oh yeah. If you do owe money you have a few options. If you can agree to a payment plan that will pay off the debt in 5 years or less, the IRS will automatically accept the payments. If you can’t afford that, and you can prove to the IRS that you can’t afford to pay it off in 5 years, they will sometimes accept payment plans that stretch the debt out longer to lower your monthly payments.
An EA can help you with an offer in compromise but you should be aware that they are rarely accepted. Basically, the IRS looks at how much money they think they could extract from you through every legal option they have, including bank levies, liens on your property, garnishing current and future wages, etc. If they don’t think they’ll ever be able to collect all the debt from you or your estate, and you can offer MORE than what they think they could get through all their collections efforts, then they’ll take the OIC. Generally they won’t accept an OIC if you’re physically capable of working or your medical conditions are expected to improve so that you could work at some point in the future.
that makes zero sense.
if you have a refund coming, you have 3 yrs to file your return and I have never heard of anyone ever having to pay any penalties
if the refunds were from years more than 3 yrs ago – you lost them those refunds by not filing soon enough and maybe you owed taxes from other years and that’s what the penalties are for
if you owe tax for any year, you have to file and pay the tax on time or you will get whacked with penalties and interest
how much do you actually owe the IRS – a payment plan with them sounds like you r only option
what you need to do is get the delinquent returns filed, it is very possible that they have created returns for you and until you file your own return and sign it it is not a ‘filed’ return
and if you had refunds due, there is no late filing penalty because it is based on the tax you owe!
absolutely, if you have not filed those delinquent returns, do so asap in response to the letters you are getting from IRS
Something is wrong here. If you filed, even late, and had refunds coming for all the years, then you wouldn’t be penalized except that if you’re more than 3 years late you wouldn’t get your refund. There wouldn’t be other penalties. If you owed for some years and had refunds for others, you’d still owe for the years when you’d have owed anyway even if you forfeited refunds for other years.
Don’t even think of using one of those tax fix firms that advertises on TV. Find a local Enrolled Agent and have them go over your paperwork and see what needs to be done.
You can file an offer in compromise yourself. The IRS decides whether to accept or reject your offer.
For any year for which refunds were owed to you, there is no penalty for late filing, and no interest.