Failure to File
Failing to timely file your tax returns is a crime. While the IRS seldom prosecutes, there is always the risk. This is why you do not use a CPA or one of those national collection companies. This risk requires a legal education, and substantial legal experience. It would be nice if the lawyer has experience in criminal investigations, as I do. It is also important that your communications about being late on returns and on the return drafting is covered by attorney-client privilege.
Being late is not uncommon. I see it frequently. The usual reason is procrastination. Don’t be ashamed of this condition, just get things right with the IRS, now that you are ready to deal with this. I also see circumstances of avoidance, because you do not have the ability to pay at the time. Wrong move, but let’s fix it now.
Let’s now focus on the return drafting itself. If it has been years since you filed, you may not have any records. I can help with that; all is not lost. Left on your own, you would report a lot more taxable income, than you would if you had help.
The common consequence of filing those returns is a payment problem. If the return you file is several years back, you are facing penalties that are about half of what you owe in taxes. And interest, while the rate is low, becomes substantially more when the several years have in past. You face the collections division of the IRS. This is where we will pick up in my next post.