You have not filed your taxes in years and the situation worsens as time goes by-feelings of dread and fear consume you. There is a good chance that you may be due a refund; however, you must request a refund within three years of the due date of the return. Another key point for filing those tax returns; the IRS ten year statute of limitations for collections. In other words, the tax balance will disappear after ten years if there are no other legal actions to toll the statute such as bankruptcy. However, the statute does not commence until tax returns are filed. The first step is to contact an Enrolled Agent to help you file your delinquent returns, and set up an installment agreement if needed. Enrolled Agents are federally licensed by the IRS to represent taxpayers in all collection matters. Only an Enrolled Agent, CPA, or Attorney can represent your case before the IRS. By law you have a right to professional representation.
Q. What if you file your tax returns and owe money? Are there options available to you?
A. Yes, there are options available. It is possible that your account can be placed in a non-collectible status if paying would create a financial hardship for you. You can request a penalty reduction if you have reasonable cause for not filing and paying timely. You can request an installment agreement. If you owe less than $50,000 and can pay the full amount within 72 months, you may be able to set up a streamline payment plan. If your balance exceeds $50,000, you will be required to complete a financial statement to assess your repayment ability. Additionally, you may qualify for an Offer in Compromise. You must be compliant with tax return filings and estimated tax payments (if applicable) before the IRS will consider any of the above options.
Q. What happens if I continue to ignore the IRS notices?
A. Your bank account or wages could be levied. Also a tax lien may be filed at the court house, and your credit will be adversely impacted. The IRS may come to visit you at your office (self- employed) or home.
Q. What happens if I receive a wage or bank levy?
A. You will be required to set up an installment agreement and or submit a financial statement. It could take weeks before the IRS will release levy. If you are experiencing a hardship based on your financial statement information – the IRS may release levy immediately.
Keep in mind there are remedies available. The IRS does not want to take enforcement action; they are only trying to get your attention to act. The system is more favorable to voluntary compliance. Do not be afraid or embarrassed to ask for help. Believe it or not most of my clients feel a sense of relief when they face the issues. Additionally, they feel as though they can finally move forward in their life. Most of the time, it is not as bad as you think.