We been practicing in South Florida since 1982 and are tax experts in the field of tax representation.
On staff are tax attorneys, tax lawyers, CPAs, former IRS agents, managers, and teaching instructors.
If you have any problems with the Internal Revenue Service in regard to back taxes or filing back tax returns contact us today.
WHAT YOU NEED TO KNOW
The IRS does want people back in the system and they have issued a formal policy statement for people that fall in this situation or category.
We can file your multiple back tax returns and settle your tax debt at the same time.
If you are in this situation, we can file your back tax returns and settle your tax debt case all at the same time.
We have been in practice since 1982 and are A+ rated by the Better Business Bureau and have on our staff tax attorneys, CPAs and former IRS agents. We have a Christian tax practice.
So, how many multiple back tax returns must you file?
IRS Policy statements form the basis for procedures and instructions on how the IRS will operate programs and activities.
IRS Policy Statement 5-133, Delinquent Returns
IRS Enforcement of Filing Requirements, provides a general rule that taxpayers must file six years of back tax returns to be in good standing with the IRS.
The policy also states that IRS management would have to approve any deviation from that rule.
Sometimes, IRS managers will require tax returns from even further back than six years, depending on:
• The degree of flagrancy.
• A prior history of noncompliance.
• The impact on future voluntary compliance.
• The existence of income from illegal sources.
• Whether there is minimal or no tax due.
• The IRS’s costs to secure the return versus anticipated tax revenue.
The IRS can require more back tax returns in three common situations:
As a former IRS agent there were certain cases that I found during the investigatory process that I wanted more tax returns in the policy statement allotted for.
These are the most common reasons the IRS requires returns from more than six years back:
1. There’s a large potential and collectable liability:
The IRS may extend the return requirement if the taxpayer’s wage and income information (found on wage and income transcripts) indicates a potentially large tax liability for the older, unfiled years. The most common red flags are Forms 1099-MISC, Miscellaneous Income, property sales, and large wages with no withholding.
2. There are business returns involved and monies can be collected.
The IRS will closely scrutinize business returns, for several reasons:
• Businesses often have unknown activity with potentially large balances owed.
• Businesses aren’t subject to much reporting with information statements.
• The IRS knows that businesses have the largest potential for noncompliance.
3. A revenue officer is on the case and feels something out there.
Delinquent return investigations can involve local field collection personnel (revenue officers), who perform in-depth investigations on non-filing and collection.
Because they often handle business and payroll collection, revenue officers can often require more than six years of back tax returns. But remember, the key factor it must have some collection potential.
For most individual cases when taxpayers don’t have a revenue officer, the IRS usually accepts the past six years of returns to put clients in good standing with the IRS.
The Use of IRS Transcripts in these matters, crucial
Anytime I get involved in the processing of this policy statement by IRS I pull IRS transcripts which give me a complete account history and all income records from the IRS for the past six years.
Transcripts can be helpful in completing back tax returns: It’s essential to prepare an accurate return that matches IRS records. If your records do not match up with the income shown by the Internal Revenue Service you may wind up with the mail correspondence audit.
Make sure the return reports all items on the transcript.
The Penalty Phase, it gets costly
Years with balances due will have associated penalties:
• Failure-to-file penalty (5% per month, maximum of 25%).
• Failure-to-pay penalty (0.5% per month, maximum of 25%); combined with the failure-to-file penalty, together they can reach a maximum of 47.5%.
• Fraudulent failure-to-file penalties triple the normal failure-to-file penalty,increasing the maximum penalty from 25% to 75%.
The IRS may have filed a return for your client: SRF tax returns
The IRS usually starts this process, called a substitute for return (SFR), about two to three three years after the due date of the return.
When your client files a return to replace an SFR, the IRS will scrutinized a little more the replacement return and compare it to information statements on file.
Make sure you file accurate tax returns.
Former IRS Agents + IRS Back Taxes + How Many Past Tax Years Must Be Filed? 6 years + Ft.Lauderdale
