A person who has two or more years of unfiled tax returns needs help with back taxes. The problems that come from not doing his or her federal returns for so long are plentiful. A person in this situation needs to get immediate professional assistance to get the IRS problem fixed.
Because of the many problems that arise out of an issue like this one, getting help with back taxes goes far beyond just filing the delinquent returns. The government assesses a failure to file penalty for each year that is not filed. In so many of the cases where federal returns are not filed by someone, there is an amount due owed to the United States Treasury Department so then failure to pay penalties get tacked onto the problem. All of a sudden, failure to file penalties, failure to pay penalties and money owed for each year starts to add up to a significant amount of money. This generally throws the person into a collections status at the Internal Revenue Service, and that isn’t good. This is just the tip of the iceberg for why someone who has many years of unfiled returns needs help with back taxes.
Here is a look at the bottom of the iceberg and where things begin to get more troublesome. When someone is in collections, the IRS frequently takes the luxury of going ahead and doing a substitute federal return in place of the one that was never done. Well, when that happens, it is left up to Uncle Sam to come up with a return that has an amount due that favors them and not the person who failed to file. Lots of people make the mistake by not filing a federal return because they think that Uncle Sam owes them money, so why bother filing one? People who need help with back taxes are often surprised to learn that a substitute federal return gets done. Frequently, they only find out about it after the IRS sends them a letter saying they owe money.
After the government does the substitute federal return, they then have a dollar figure that they can go collect from a person. They will do wage garnishments where they take a portion of someone’s paycheck if need be. They will do bank account levies where they take money from someone’s bank account if they see fit. They will issue a federal lien that can wreck someone’s credit and ability to borrow money or sell property if the urge hits. There are plenty of other collection actions the government can take as well that are more aggressive than the usual garnishments, levies and liens. The importance of getting help with back taxes sooner rather than later is critical because the longer the problem lingers the worse it gets. The penalties and the interest just get worse over time, and a person opens themselves up to collection actions.
The professional person that someone hires to help will need to contact the IRS quickly. They will need to get all the unfiled returns done quickly. They will also need to deal with the collection problem, and then work out some type of settlement.