Late Tax Returns

It is common for a Client to have failed to file income tax returns for five (5), ten (10) even twenty (20) years. Our staff and contractors of Tax Attorneys, Certified Public Accountants, and Tax Preparers are specially trained to handle the preparation of multiple years of delinquent returns and we have developed a specialized procedure to prepare delinquent returns for Clients who have lost part of all of their records. In addition to obtaining income and expense information the Internal Revenue Service and state tax agencies like the Franchise Tax Board has on a Client, we also try to review every income tax return prior to completion to ensure that the income being reported on the return does not appear to conflict with the economic reality of the Client.

Willfully failing to file required tax returns are both federal and state crimes and violators face potential jail time if convicted. If you are caught and convicted, you could face jail, substantial criminal fines and penalties, and then the assessment of the taxes you owe along with additional substantial civil penalties and interest. Preparing and Filing past delinquent returns (i.e. becoming compliant) is typically the first step needed to take advantage of the Criminal Tax Amnesty Program offered by the Internal Revenue Service and many State Tax Agencies along with other programs like Offers in Compromise which are designed to help taxpayers get a fresh start.

In many cases, the Internal Revenue Service and applicable State Tax Agency, like the Franchise Tax Board, will simply make up a return for each year a taxpayer does not file (i.e. SFR return), assess taxes, penalties, and interest based upon this made up return, and then begin collecting until the amounts are paid in full through wage garnishments, bank levies, and the seizure of property the taxpayer owns. This process can be financially catastrophic because as a generally rule, returns made up by the Internal Revenue Service (IRS) and State Tax Agencies like the Franchise Tax Board (FTB) use only income information reported to them and fail to take into account exemptions for spouses and children, deductions for home mortgage interest, legitimate business expenses, and even the cost basis of Real Property and Stocks.

As a result, it is common for taxpayers who fail to file returns to receive tax bills for hundreds of thousands and even millions of dollars even though their actual income was quite modest. Further, because of the way the income tax laws are written, taxpayers can only obtain any tax refunds for a very limited time but the taxing authorities can collect any taxes owed for a much longer time and in some cases forever.

There are typically a number of options for dealing with delinquent income tax returns, tax bills, penalty assessments, wage and bank levies, tax liens, etc. However, as a general rule, the longer the problem festers, the more difficult and complicated it becomes to resolve. Therefore, if you have failed to file tax returns or have some other tax problem, you should contact an experienced tax attorney immediately.