Many of our clients come to us because they haven’t filed their income tax returns for several years.
Some have never filed.
The typical reason given for not filing is that the taxpayer didn’t have the money to pay the tax.
By failing to file a tax return because of an inability to pay, the taxpayer effectively converts what would be a civil collection matter into a potentially criminal one.
Title 26, U.S.C., Sec. 7203, makes it a crime for a person to willfully fail to file a federal tax return when he or she is required to do so.
A person can be found guilty of that offense only if all of the following facts are proved beyond a reasonable doubt:
A person is required to make a federal income tax return for any tax year in which he has gross income in excess of a specific amount, set by law, which changes from year to year.
If you owe the IRS back tax returns, you need to file them immediately to prevent a referral to the Criminal Investigation Division.
If you don’t have records for the prior years, you may estimate your income and expenses and file a return that includes a disclosure that you have done so.
The IRS audited my 2007 and 2008 tax returns and disallowed 100% of my business expenses because the auditor said I didn’t have sufficient records. I hired The Pappas Group and they were able to prove by other means that my deductions were valid and the IRS ended up only disallowing about 15% of my expenses. Had I not hired Pappas I would been assessed taxes, penalties and interest in excess of $100,000. The Pappas group now does all of my accounting work and prepares both my business and personal tax returns.
The IRS put a lien on my assets and said I owed it more than $70,000. I hired Pappas and he prepared and filed my delinquent tax returns, got the IRS debt reduced to less than $10,000 and got the lien released. The Pappas Group did what they said they would do.