Filing Back Taxes
Filing Back Taxes for Corporations & Individuals
Filing of back taxes successfully is a challenging tax. They are not hard to prepare, but require patience, persistence and communication skills. Usually, there are reasons the prior years’ tax returns are not filed. Incomplete bookkeeping and lost tax records are very common. Also, the person is often looking at IRS tax debt, and is a confirmed tax procrastinator. Thus the first step is getting the client’s trust and commitment to following through on the filing of past-due taxes. Once this is done, the next step is to have the client sign an IRS Form 2848 naming Torchlight Tax to represent him. With this, I get IRS transcripts of any years that might influence his tax situation. I fill out the IRS Power of Attorney go back for more years than I expect to need and go into the future as well. This way I get all the tax data that might conceivably bear on my client’s tax problem and have no surprises from the IRS. By going into the future, I make sure I can represent him if needed even if the IRS delays on an IRS Offer in Compromise or Currently Non Collectible status.
Once the tax returns are filed, the most likely scenario is not that my client immediately pays in full all this tax liability. If he is eligible for Currently Not Collectible Status or an IRS Offer in Compromise, then these are likely scenarios. If not an IRS Installment Agreement and Penalty Abatement are certainly likely. Filing the un-filed tax returns expertly and using every possible tax saving stratagem is the first step. Handling the resulting tax debt by expert IRS Negotiation is the next. You are paying for every bit of tax and IRS negotiation skill we have to get the best possible resolution to your IRS tax problem. It is our duty to deliver that.
After the IRS Power of Attorney is signed, I immediately call the IRS and request tax transcripts. I want to get them fast so that we maintain momentum and so the taxpayer does not sink back into bad procrastination habits and apathy. Then next step is to have the taxpayer send us the tax data he has. He may have data the IRS does not have and this is important. If I have to get state tax data, I request this as well.
Now I have a lot of basic data to work with. If the client is a W-2 employee, I may be home free or close to it. I know how many years returns I have to file and I have most of the data. If the client is a Schedule C filer, an LLC, a partnership or a corporation, here comes the difficult part. The IRS will not have the expense data for a sole proprietor, an LLC, a partnership or a corporation. Filing back taxes without this data could give a false and overwhelming tax debt for my client. And getting this data out of my client may not be easy. We may be asking him to do something he was unable to do in the past. He may never have been able to work out these expenses. And he may be terrified at the IRS tax debt he is about to officially acknowledge. So we work with him and get the data. We may even need to have our Torchlight bookkeeper reconstruct a profit and loss statement from his bank accounts.
Negotiating with the IRS
Now, comes the good part. Negotiating a favorable resolution with the IRS. Here the skilled EA (and his IRS Negotiation tax program) come into play. What will it be? An IRS Offer in Compromise, reducing the IRS debt? Currently Non Collectible status where the client is left alone by the IRS as they cannot legally collect the debt? An installment agreement that gives him six years to pay off his debt combined with a penalty abatement that lowers the bill? One of these resolutions is now probable. For more details on these, see the service section under IRS representation. None of these resolutions are possible with un-filed tax returns.
Get Your Taxes Done the Right Way
If you are considering using Torchlight Tax to file your back taxes, contact us now for a free consultation. This can be done in person or on the phone, or even a video chat. We will do our best to help you, and there is no obligation. We figure we do our best to help people with their tax problems, we will have plenty of paying clients. You can call us and see if we seem like a good fit for you. It is extremely important that we know, like and trust each other. Dealing with un-filed back taxes is a stressful activity. You will be giving us all kinds of personal, financial information. Moreover, our care and expertise is vital to a successful resolution of what may seem a threatening tax situation. You have to feel comfortable trusting us. We will be presenting your data before the IRS. We have to trust you as well. Successful resolution of past tax difficulties is a team operation between you and your tax professional. Contact us now for a free consultation.