There are several issues regarding late tax filings or unpaid tax balances. First, it is very stressful to deal with unknown outcomes and the accompanying potential financial burdens. Second, most people do not have the knowledge to represent themselves in these situations resulting in additional stress and unfavorable results. And finally, there are so many companies that offer Tax Resolution Services that it is difficult to choose a firm that you can trust.
Problems with the IRS will not just go away. If you owe back taxes to the government, they will incur interest and penalties that continue to build and snowball. It may seem like the IRS isn’t doing anything, but at some point they will come after you and they do not give up. They can garnish your income and put a lien on everything you own. It is one of the most stressful things an individual or business will have to deal with, so don’t try to do it on your own.
Let’s be honest, some situations are difficult to resolve. If a tax return was prepared with significant errors there is no quick fix. In these situations the next step is either negotiate a reduced settlement if applicable or make affordable payment arrangements. We offer a thorough evaluation of your specific situation and outline the steps that we will take as your representative.
What if you are two, three or more years behind in filing personal or business tax returns? As a CPA firm, we have the experience to assist you in gathering the financial records to prepare these returns. We believe that it’s important to keep you in compliance with tax laws while paying the least amount of taxes legally possible. We will help you uncover whatever tax deductions you are legally allowed to take. We will help you get it done, get those past years filed and become current in all years going forward. This burden will be eliminated forever!
Always file your tax return. Regardless of whether you’re able to pay your tax debt, filing your return by the deadline will help you avoid penalties and interest. The failure-to-file penalty is steep—usually the cost is 10 times more than the failure-to-pay penalty.
The penalty for failing to file is generally five percent of the unpaid taxes for each month or portion of a month that your tax return is late; it builds on itself, but will never exceed 25 percent of your total unpaid tax debt. Compare that to the penalty for paying late: a mere .5 percent for each month your taxes go unpaid. The minimum late filing penalty is $135 or 100 percent of your unpaid tax, whichever is less.
This is not just about resolving current issues, it’s about developing a long-term business relationship.