How to Handle Unfiled Taxes

HOW TO HANDLE UNFILED TAXES

Having unfiled back taxes is a common source of anxiety and problems. It can create marital upsets, prevent you from getting a loan, and make life more dreary than it needs to be. It is not hard to handle. Once handled, you can get on with your life without worrying about taxes.

This is Dave Horwedel, CEO of Torchlight Tax. Unfiled taxes are usually the first tax problem to handle, because most of the other problems cannot be solved until they are filed. Unfiled taxes block negotiating an Offer in Compromise, getting an Installment Agreement approved, getting Currently Not Collectible status, or getting penalties abated. 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 years have not. It gives us exactly what data the IRS has on you. As a practical matter, taxpayers with unfiled tax returns often do not know for sure what years were filed and what years were not. Better to be safe than sorry. THE BROAD VIEW At Torchlight Tax, we take a broad view. We pull transcripts going back 15 years to make sure there is not an earlier year that shows a liability or needs to be addressed. We also get Wage and Income Transcripts from the IRS. 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 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 IRS records will be incomplete, and there may be 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 years’ taxes. There are limits on how many back years the IRS will require. Usually, the filing of the last six overdue tax returns is adequate.

If you have unfiled tax returns, contact Torchlight Tax at 1-877-758-7797 for a free consultation or email info@torchlighttax.com. We will be glad to help you. While you may find your tax situation upsetting and confusing, to us this is simply all in a day’s work. One of the most rewarding things about preparing taxes is seeing the taxpayer’s relief when the backlogged taxes are filed and the tax situation fully resolved. We look forward to hearing from you.