I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The IRS has several programs going that are looking for serial non-filers. The bad news for people in this situation is that society is collecting more and more information about people in general and the IRS is getting better at using these public databases to find them.
What should you do to get out of this mess? Here are the steps that you should follow:
- Prepare the missing returns for only the last six years. The IRS’s internal rules is to normally only look for the last six years. If you are not in a community property state, don’t forget to consider Married Filing Joint vs. Married Filing Separate.
- If you can’t full pay the total taxes due, do the calculations for the Reasonable Collection Potential (RCP) to figure out your options on how to clean up the debt. This is not a do-it-yourself project – get help.
- If state income taxes are also required, consider whether you should file these returns first. The IRS will take state tax liabilities into consideration when it comes to determining how much of your monthly income should be paid to them.
- File the federal returns.
- Make “all” of your current year estimated tax payments if required. Make sure your employer is withholding the correct amount if you are an employee. The IRS will not make any deals unless your current year payments are up to date.
- Depending on the strategy that you developed in step 2, it’s now time to begin talking to the IRS about your ability to pay and working out a deal that will get you out of their crosshairs. This could be a payment plan, an offer-in-compromise, or being classified as uncollectable.
Your impulse might be to wait until they catch you. Maybe this puts off the reckoning for another year or two, but chances are good that they are going to get around to you. It’s better that you show your good intentions up front by getting this taken care of before they begin collection actions.
If you or someone you know has received a Notice of Intent to Levy or some other federal or state tax issue, please feel free to contact me at either (352) 317-5692 or email jim@backoffice2.net.
Gainesville, FL
Cell (352) 317-5692
Office (352) 376-9401
Fax (352) 376-9440
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