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 Agency 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.
(619) 595-1655
rshamoun@irssolution.com
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