If you have not filed tax returns which are past due, you have to take action now to fix it. IRS might react slowly and the problem of those late filing seems not hurting you right now, but it could be very serious a few years later. The consequences of the late or unfiled tax returns could lead IRS to prepare the returns for you. Certainly, they will be likely overstating your tax liabilities.
To fix the late filing issue, you want to file the past due tax return voluntarily. If the non-compliance has a long history, you at least want to hire a professional to file the most recent six years of tax returns.
After your CPA helps you file the returns, you will soon receive the notices of each returns IRS received and processed. Pass them to your CPA to ensure the tax liabilities are matched to what you filed. Pay for the tax dues, late payment penalties and interest as soon as possible or filing an installment plan. If the tax due is less than $50,000, IRS usually grants you a 72-month installment plan.
It will be likely IRS charges you late filing penalties and failure to pay penalties, discuss with your CPA before you pay for them as there might be a way to reduce them. If this is the first time to have the late or delinquent tax filing, your CPA may help you waive the penalties by make request of first-time abatement. If you don’t qualify for such abatement, you may need to discuss with your CPA to see if there was any reasonable clause which might help you get relief from the penalties.
We have experience in helping some of our clients to relieve the late filing penalties. Feel free to contact us if you have the late filing issue. We can assist you to be back on the right track!
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