Back Tax Returns: Getting Help When You Need It

Posted on 23. Apr, 2012 by in Back Tax Returns, Back Taxes, Filing back tax returns, Filing Back Taxes

If you find yourself behind on your tax filings, there are plenty of reasons to get caught up.  If you have ever neglected to file a tax return, yes, you do still have to file all your overdue returns. The only circumstance in which filing a tax return may not be required is when the taxpayer did not earn enough income in a given year to warrant filing a tax return. Taxpayers must also make sure to comply with all their current tax payments.

If you are self-employed, or if you receive revenue from investment dividends or royalties, being in compliance means you must make your estimated tax payments on those income sources on a quarterly basis. It’s a good idea to find out what your compliance status with the IRS is, and, if you are not in compliance, what you can do to reach compliance status.

There are penalties that the IRS can assess and this is a situation in which a tax professional can help.  Failure to pay penalties can be assessed when a tax liability is not paid on time by the due date.  The rate for the failure to pay penalty is ½ of 1% of the total tax liability. The maximum penalty is 25% for failure to pay penalties.  Similar to the failure to file penalty, you may be able to show just cause as to why the return was not paid on time.  You most likely not be able to get an extension on your tax payment as you are expected to estimate and pay your tax liability on time even if you do not file your return timely.

Of course, there are many penalties the IRS can assess and these are just a couple of them.  But these are the most common.  It is always best to seek the help of a CPA or other tax professional when dealing with a sizable tax liability.  Remember that the objective of the IRS is to collect revenue from taxpayers.  They do not necessarily have your best interests at hand.  But at least a CPA will help ensure that your rights as a taxpayer are not in jeopardy.

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