One of the most common tax problems is unfiled tax returns. This is usually the first tax problem to handle, because most of the other problems cannot be solved until this is resolved. If you have an imminent tax levy, this levy might require a quick call to the IRS to get time to file. Generally, unfiled tax returns are priority, as other solutions such as the Offer-In-Compromise, Currently Not Collectible Status, and the Installment Agreement are blocked by unfiled tax returns.
But what do you do if you haven’t filed your taxes for years and you don’t have the records or bookkeeping necessary to file those taxes? The first step is a Torchlight Tax Analysis. You sign a power of attorney with us and we procure all your IRS records. This shows us immediately what years have been filed and what have not. As a practical matter, taxpayers with unfiled tax returns often do not know for sure what years were filed and what years were not. Maybe they went to a tax preparer and he was supposed to file, but they never got word that he did. Or maybe the taxpayer had to get some data together or pay a fee, and he dropped it.
The Broad View
At Torchlight Tax, we take the broad view and cover all possibilities. If the taxpayer tells us he did not file for 2015 and 2016, we have him sign an IRS Power of Attorney going back to 2010. And when we get the data we need for 2015 and 2016, we also request the earlier records. That way if the IRS shows earlier unfiled return or returns, we catch it at the beginning and handle it then. It also allows us to view the Wage and Income Transcripts the IRS has on you. In some cases we can file your taxes directly from these transcripts. This would be possible, for example, if all your income was W-2 income and you were taking the standard deduction.
On the plus side, the IRS will find no fault with these filings as they are based on the IRS’s own records. Sometimes these records will be incomplete, and they may miss many expenses that would give you a tax break. You may have these records, or we may be able to reconstruct them from your bank or other records. Also, you may not have to file ALL prior year taxes. There are limits on how many back years the IRS will require. If you have unfiled tax returns contact Torchlight Tax at 1-877-758-7797 for a free consultation.