WHAT TO DO IF YOU FORGOT TO FILE YOUR TAX RETURN

Tax Preparation

What to Do If You Forgot to File Your Tax Return. Many taxpayers forget to file their tax returns every year. This could happen for several reasons:

You completed your tax return and thought you submitted it to the IRS, but you never did.

The IRS rejected your return and you did not resubmit it.

You were distracted by health problems, financial problems, or some other issues.

You simply forgot to do your taxes.

If you were required to file a return and didn’t, you should complete and submit your return as soon as possible to minimize your penalties and other consequences.

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Unfiled Returns When Tax is Owed

If you owed taxes on your return, you’ll face several penalties:

The failure to pay penalty, which is generally 0.5% of the tax due each month.

The failure to file penalty, which is 5% of the tax due each month.

Interest that accrues each month at rates set by the IRS.

You’ll also need to pay your back taxes. If you can’t pay all of these amounts in full, you may request an IRS installment agreement to make monthly payments. You may also be able to seek penalty relief to reduce how much you owe in tax penalties.

Unfiled Returns When a Refund is Due

If you are owed a tax refund, you won’t face any penalties for failing to file your return. However, you need to file the return within three years of the return’s due date (usually April 15) to receive your refund. After that, you are no longer eligible to receive your tax refund.

Even if you didn’t overpay in tax withholdings, you may still get a tax refund if you qualify for certain refundable tax credits, such as the Earned Income Credit. You need to file a return to receive a refund, even if you aren’t legally required to file.

Other Consequences

The longer you wait to file your return, the more likely it is you’ll face additional consequences. Your penalties will continue to accrue. Eventually, the IRS can file a tax return on your behalf which is known as a Substitute for Return (SFR).

Once the SFR is filed, the IRS can assess tax and then seek to collect it. Your bank account could be levied or your wages could be garnished if you don’t pay your tax and work out a deal with the IRS.

Avoid these problems by filing your tax returns as soon as possible and contacting a tax attorney to discuss your tax repayment options.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

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THE PROS AND CONS OF APPEALING AN IRS DECISION

Tax Debt Help

After you have dedicated your time and energy to earning a lucrative income, an IRS tax liability increase can seem unfair. For those in Houston, Texas that abide by tax laws, getting a notice that you owe more than you believed is particularly hard to accept.

Fortunately, you have rights that can help you resolve your tax issues. One of the most beneficial of these is the right to appeal a decision handed down by the IRS. However, appealing your IRS case comes with disadvantages as well as advantages. It is critical to understand these so that you will make the best decision to protect your assets.

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What are the benefits of appealing an IRS decision?

Most people do not appeal decisions made by the IRS, likely because they do not believe they can win. It might surprise you to know that your odds of a successful appeal are pretty high. On average, an IRS appeal reduces tax liability by about 40%. Other benefits of appealing include:

It costs zero dollars

It can eliminate or reduce previous tax liabilities

It is an easy process

Appealing IRS decisions can also extend the deadline for when your taxes are due, giving you more time to gather the necessary funds.

 

What are the downsides of an IRS appeal?

There are few disadvantages of initiating an appeal. One downside is the risk of an appeals officer uncovering previously missed tax liabilities, which will increase the amount you owe. The other disadvantage is that penalties and interest on your balance continue to accrue during an appeal. If you do not win the case, you may end up owing more than you did before you appealed

Increasing your knowledge of federal tax laws and IRS appeal regulations can add strength to your case.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

 

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BEST PRACTICES FOR FILING BACK TAX RETURNS

A taxpayer should use these best practices to resolve a late filed return:

Use IRS wage and income transcripts to file an accurate return.  Late filed prior year returns are closely screened by IRS tax examiners before acceptance to make sure that all income items reported to the IRS (Forms W-2 and 1099) are included on the return.  Taxpayers can pre-screen their returns for accuracy by obtaining their IRS wage and income transcripts directly from the IRS and confirming these items were reported accurately on their return.  This will speed up the acceptance of the return as well as reduce the likelihood of an audit or discrepancy notice.

 

Monitor processing and acceptance. The IRS can take 4-6 months to accept a return as filed – especially if the return is paper filed or if the IRS has current or prior SFR enforcement activity.  Taxpayers should periodically contact the IRS (i.e. every month) to check on the status of the filed return.

 

Request a collection hold to allow to process a return when an SFR has been filed. Taxpayers with an SFR filing will have a balance owed to the IRS.  The taxpayer should request a collection hold to avoid collection enforcement during the time period in which the IRS is reviewing and determining acceptance of the late return.

 

Only the current and past six years are required to be filing compliant.    The IRS usually only requests individual taxpayers to file the current and six prior years’ returns to be compliant.  However, the taxpayer should file any prior tax year in which the IRS filed an SFR.   Taxes owed from an SFR can usually be lowered by filing an original return that claims additional deductions and credits not allowed in an SFR.  Taxpayers who want to know how many years the IRS requires should ask the IRS.  If the IRS requests more than the prior six years, the taxpayer should confirm that the IRS has made a deviation from their normal six-year policy.   Deviations from the six-year policy rule require an IRS manager approval.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

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GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

 

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief

#TaxHelp 

#TaxRelief

#BestTaxReliefCompanies

CAN THE IRS FREEZE A REFUND WHEN I HAVE UNFILED RETURNS?

​Yes, if the IRS identifies that the taxpayer has an unfiled prior year return (especially a return in which the IRS projects a balance owed), they can freeze the refund and request the taxpayer to file.   The refund is held for 6 months while the IRS requests a filed return from the taxpayer.  If no return is received, an assessment may be made through the Automated Substitute for Return (ASFR) program, and the refund applied to any balance due.

Need help with filing back taxes and solving back taxes? Call (713)300-3965

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IRS Collections: What You Need to Know (Post COVID-19)

During the pandemic, the IRS temporarily halted all collection actions. In the coming months, IRS Collections will begin again, impacting taxpayers across the United States. Here’s what you need to know.

As we enter a post-pandemic state, the IRS begins to normalize the collection process and return to its regular pace. This will have an impact on taxpayers facing potential federal tax liens or levies, as well as other IRS collections actions.

Collection actions are part of the IRS’s repertoire against missed deadlines, unfiled tax returns, and missed tax payments. If you owe the government money, it can and will collect – eventually. Until it does so, it will coerce collection through ramping penalties and interest, and a restrictive tax lien.

These consequences can be avoided – if you’re prepared, and act as soon as possible. Let’s go over how the IRS plans to approach collection actions throughout the rest of 2021 and beyond, and let’s review the official timeline.

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Why Were IRS Collections Put on Hold?

As part of an effort to reduce the pressure of economic instability following the lockdowns implemented as a result of COVID-19, the IRS delayed and held off on pursuing certain action collections starting March 2020. This included holding off on issuing federal tax liens.

However, things will begin returning to a more “business as usual” pace, according to a memo released on June 15, 2021, as COVID-19 restrictions continue to loosen, and the country continues its path towards normalcy.

IRS collections will begin, including levies on wages and bank accounts, after 30-45 days of issuing a taxpayer notice. Levies and liens will resume starting August 15th, 2021. However, taxpayers who have previously received tax lien notices for their late and overdue tax payments will have begun receiving further notices as soon as June 15th.

Tor recap the specifics of the memo:

Balance Due notices are usually automatically sent to taxpayers when a deadline has passed, and the balance remains unpaid. Starting June 15, 2021, the IRS will begin following up on taxpayers who have not responded to older notices.

Taxpayers with prior notices (tax liabilities dating back to 2019/2020 or older) will be notified that they have between 30 and 45 days to respond before the IRS takes further action.

Taxpayers who fail to respond may be subject to liens and levies starting August 15, 2021.

 

What Are Tax Liens and Levies?

Tax liens and levies are the IRS’s primary means of enforcing a taxpayer’s responsibility to pay their respective tax dues. With IRS collections, the primary goal of a lien or levy is to encourage a taxpayer to settle their debt – and both liens and levies make a compelling case for doing so.

A federal tax lien is a legal claim on your assets and property on behalf of the government. Federal tax liens are a matter of public record, and they mean that the government has the first right to your assets as creditors. What this boils down to is a block on other forms of financing. Under a lien, you must pay your debt to the government before other creditors can collect from you. This can make it very difficult to secure a loan or seek financing.

– Tax Liens

Tax liens are one of the last things to be lifted when tackling your tax account’s overdue payments. Even declaring yourself currently not collectible does not eliminate a tax lien. Tax liens are lifted when the debt is paid but may also be prematurely lifted if you enter into a long-term payment plan with the IRS, and have been adhering to it consistently.

If you somehow choose to ignore a lien, or a notice of a lien, then it may escalate into a levy.

– Tax Levies

A levy is an actual claim on your assets and property. The government may clean out a bank account, take a portion of your paycheck every time it comes in (based on your filing status and number of dependents), or take and sell a non-primary property you own at its quick sale value.

If any of these IRS collections actions result in you still owing the IRS money, they may issue a second levy, or continue to garnish (claim) your wages. If the sale of your property or emptying of a personal account resulted in a remainder after your debt was paid, the IRS will send you that remainder.

Most people rightfully want to avoid levies at all costs. Regardless of whether you’re employed or self-employed, a levy can be an unexpected and painful intrusion into your financial health.

If you want to know how to avoid liens and levies and aren’t sure how to pay off your tax debt, your first priority should be to get in touch with a tax professional. You want someone who can communicate with the IRS and help you negotiate a plan that suits your circumstances and financial capabilities, without risking an extended lien or levy.

Other IRS Collection Programs to Resume

Aside from resuming liens, the IRS has also made note of the Department of State’s (DOS) right to exercise their authority to revoke the passports of taxpayers with seriously delinquent tax debt, starting July 15, 2021.

The IRS has resumed identifying and naming examples of seriously delinquent tax debt starting March 2021. Being certified seriously delinquent by the State Department restricts a taxpayer from obtaining a passport or renewing their travel documents.

Furthermore, the IRS will continue to automate levies in coordination with other state and federal agencies, by the following dates:

June 2021: Balance due notices (will start being mailed by the Automated Collection System (ACS).

July 15, 2021: Automated levies will go out via the Federal Payment Levy Program (FPLP), State Income Tax Levy Program (SITLP), and the Municipal Tax Levy Program (MTLP).

August 15, 2021: Automated levies will continue for the Alaska Permanent Fund Dividend Program (AKPFD). Notice of Federal Tax Liens will also be issued starting August 15.

The IRS has also made several unrelated announcements on the subject of tax enforcement and tax investigations. These include new cryptocurrency tax enforcement projects, investigations into high-income non-filing taxpayers, and repatriation suits to be filed against taxpayers with foreign assets through FATCA, and more.

IRS collections are ramping back up. If you have been putting off your IRS debt, now is the time to take action. Contact our team of professional tax attorneys today.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants, and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

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Understanding IRS Notice LT11 (Letter 1058): How to Respond

As of June 2021, the IRS has begun issuing balance due notices and final notices to taxpayers as the collections process resumes. If you receive an IRS Notice LT11 or Letter 1058, here’s what you should do.

Here’s an important piece of news: according to the IRS, balance due notices (including final notices) are in the process of being mailed by the agency’s Automated Collection System (ACS) starting June 2021.

This is significant because it represents the IRS’s pivot back towards a traditional collection system following the leeway the agency has been giving tardy taxpayers during the coronavirus pandemic.

As we are approaching a post-pandemic world, the IRS is warning taxpayers through a number of different notices that collection actions will soon resume, including both tax liens and levies. Among these notices, perhaps the most frightening is Notice LT11, or Letter 1058.

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What is IRS Notice LT11?

IRS Notice LT11 is one of the very last notices the IRS will send before commencing a levy. As per the IRS itself, it means that they “intend to seize your property or rights to property”. The IRS also states quite helpfully that you “must contact us immediately.”

A Notice LT11 represents one of the last warning shots the IRS can fire before using the most powerful tool in its collection’s arsenal: the levy.

 What is a Levy?

A levy represents a claim on a taxpayer’s assets or property to pay for an overdue tax balance in the event of extreme tardiness. Levies can be issued on the property, bank accounts, as well as paychecks.

When issued on wages (as well as any other form of compensation), the IRS will garnish a portion of your paycheck depending on your income and your total number of dependents. In other words, you receive what the IRS deems the minimum, and everything past that goes towards paying off your tax debt. Garnished wages are automatically withheld by your employer under the authority of the IRS.

If you are self-employed, the IRS will levy your bank account. Rather than making periodic withdrawals as per wage garnishment, a levy on a property or bank account is generally a one-time thing, where the IRS will liquidate what you own to correct your balance.

A Notice LT11 also represents one of your last chances to avoid the levy. You have a few ways of doing this. More on that later.

When Are Levies Being Issued?

While Notice LT11, and other notices, are going out as early as June 2021 and will continue to go out in the weeks and months following, the actual date for when levies are being issued is August 15, 2021. This is the kickstart of the ACS’s continued collection actions in the post-COVID US.

Levies vs. Federal Tax Liens

Levies should not be confused with tax liens. A tax lien is a legal claim by the government on all of your property and assets. Unlike a levy, where the IRS can swoop in to claim and liquidate an asset or a bank account, the IRS does not actually take anything from you when it issues a lien.

It does, however, place itself first in line as a creditor, superseding all other creditors you may owe money to. This allows the IRS to pressure taxpayers into paying their overdue balance by keeping them from seeking financing without first addressing their tax problem.

A lien can be lifted by negotiating a payment plan with the IRS, which can include allowing a single creditor to “cut the line” in order to secure a loan to pay back the tax debt, for example.

Tax liens used to apply even more pressure to taxpayers in the form of a significant negative credit score impact, akin to bankruptcy. However, credit reporting agencies have discontinued including tax liens in their reporting as of 2018. Cited reasons included issues with accurately reporting the information, such as linking liens to the wrong people due to similar names and locations.

When liens fail, the IRS can turn to levies to take what it needs.

What Should I Do to Fight a Levy?

The IRS gives taxpayers two options when dealing with collection actions:

Pay, or;

Become uncollectible.

Non-collectible taxpayers must qualify as such by being in dire economic circumstances, which freezes the age of the debt (meaning it cannot expire while you’re non-collectible) but keeps the IRS from issuing any collection actions against you until your financial situation improves considerably.

It determines this by checking in periodically. You are still encouraged to file your taxes – failing to do so can incur more penalties, and you can’t negotiate repayment without being up-to-date with your tax returns. Your tax debt will continue to accrue interest and grow while you’re non-collectible.

Unless you are completely out of financial options, becoming non-collectible is not a great answer to your tax debt issues. There is another way.

 

If You Can’t Pay Everything, Pay Less

If you’re about to receive a final notice with the intent to levy, then your priority needs to be to convince the IRS that you’re ready to cooperate and pay up. Depending on the size of your tax debt, this might not be an easy feat – even if you decide to pay monthly. Some tax debts are so large that a person struggling under new financial circumstances may have enough to keep on living, but not enough to make significant monthly contributions towards eliminating their tax debt before the debt expires.

The IRS knows this, which is why it allows taxpayers to make offers in compromise in cases where a taxpayer’s financial limitations keep them from fully absolving the debt before its statute of limitations. While qualifications for an offer in compromise have become laxer since the Fresh Start Initiative – you typically don’t have to pay until the debt expires anymore, for example – it still isn’t easy nor guaranteed to get an offer in compromise.

If you are interested in pursuing this option, it is vital that you speak with a tax professional. You can test your chances by trying out the IRS’s pre-qualifier tool but understand that working with the IRS can be difficult, and requires navigating a long list of notices, letters, and systems. Experienced tax professionals can help you reduce what you owe, avoid levies, and get back into good standing with the taxman.

If you received a Notice LT11, Letter 1058, or any other notice for collections actions, call our team of tax professionals today.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

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HOW TO FILE BACK TAXES AND STOP THE IRS

Back taxes is a term used to describe money owed to the IRS that was not paid at the time it was due. While back taxes are frustrating, the good news is there are ways to set things straight after the fact and make things right with the IRS.

The important thing to do is make sure you include back taxes when you file. There are consequences if you do not.

Consequences of Not Filing Taxes

Most taxpayers are required to file a tax return each year. The point is to make sure you file even if you are afraid of how you will pay back the money you owe. The IRS actually has some resources and ways to assist with tax debt.

However, when you fail to file, the IRS is more likely to crack down on you. The IRS keeps track of taxpayers who are required to file, yet fail to do so. The agency has the ability to pursue those missing returns and bring down heavy penalties and fees. 

Additionally, the IRS can submit a return on your own behalf without any credits or deductions. This means that you will owe them the most amount of money possible. They can also put a hold on any future tax refunds.

As a result, even if you owe taxes and can’t pay, you should always file tax returns for back taxes in order to remain in good standing with the IRS.

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How to File Back Taxes for Your Tax Return

Whether you have one missing year or many returns to file in regards to back taxes, you should proceed to make things right with the IRS. An experienced tax professional can assist with this process as well. They’ll help you:

Gather your tax documents for the missing year(s).

Request missing documentation from the IRS.

Download prior year IRS tax forms.

Prepare your new back tax returns.

Submit your back tax returns to the IRS.

Gather Tax Information

Once you figure out which years you need to file for back taxes, you need as much information related to that tax year as possible. First, request your wage and income transcripts from the IRS.

The transcripts will help you identify the Forms W-2 and 1099s that you need to prepare for the return. If you are self-employed, you will need to gather further documentation. The same is true of investment income or other forms of income that is not on file with the IRS.

If you need more time to gather this information, you can request an extension from the IRS to file a late return. However, there are no promises they will abide and stop sending tax liens or levies for past due amounts.

The IRS generally requires that you file returns for the current year as well as the previous six years (if any years are missing). However, you can get more clarification on this rule by speaking to a tax pro since each situation is unique.

File a Return for Back Taxes

The process of filing back taxes is the same as if you were filing for the current year. You will include all the income you earned from the missing year(s). You will want to make sure the return is accurate and double-check everything.

If you can’t pay back the full amount of back taxes at once, you can consider options like entering a payment agreement with the IRS or requesting an Offer in Compromise.

You also have the ability to attach a penalty relief request to the return. It is applicable in certain situations and may wipe clean some penalties for failing to file in the past.

Once you submit the return for back taxes, make sure it is sent to the right IRS location based on your circumstances. It is also important to get proof that you submitted the old return. 

Monitor Tax Return Processing & Compliance

It is important that you remain compliant with the IRS while you work to resolve back taxes.

As a result, you can periodically request your account transcripts from the IRS to make sure the return with back taxes was processed. Just remember that processing can take some time.

If the IRS previously took other actions against you, such as liens, levies, etc., you will want to make sure the agency has closed the case with no outstanding issues.

Make Back Taxes a Thing of the Past

You don’t want to get on the bad side of the IRS. Failure to file tax returns from previous years is a major no-no. It is better to file for back taxes and figure out how you will cover the debt than to simply ignore the IRS.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief

#TaxHelp 

#TaxRelief

#BestTaxReliefCompanies