Back Taxes Fixed Up

FORMER IRS REVENUE AGENTS, OFFICERS, AND IRS Group MANAGERS and TRAINERS can GET YOU BACK IN THE SYSTEM WORRY FREE

The members of the Best Tax Pro team have a combined 80+ years of direct experience working for the IRS in the local, district, and regional tax offices of the Internal Revenue Service.

As Former IRS Revenue Agents, Officers, Trainers and Group Managers, we know the protocols and the systems behind the scenes. We know how to make this a very simple and affordable process.

Whether you have your prior year’s income tax records or not, we can help you file your unfiled, not filed, back or late tax returns with the IRS. We can help you settle your case most efficiently becausewe know the system from both sides of the table. We can help you close your case with the IRS and help you get a Fresh Start!

Do not worry – We can help get you back in the system, worry free!

At Best Tax Pro, we are a team of former IRS Revenue Agents and Officers, IRS Group Managers and IRS Tax Instructors. If you have unfiled and back tax returns, we have affordable pricing available to help you ensure that you file all your back tax returns. If it ends up that you owe taxes, we can work out an IRS tax settlement. The members of our team we have filed thousands of unfiled tax returns. Do not let the fear of the IRS get into your way of  filing back tax returns because, let’s face it: at some point in time, the IRS will be making contact with you about your unfiled, not filed, back or late tax returns.

With the new IRS improvements of technology, in the very near future you will be getting a letter from the Internal Revenue Service becausethe IRS is getting more and more sophisticated in their income tracking. It is best to take an assertive position with the Internal Revenue Service and get your tax returns filed so you can work out a settlement with them before they catch up with you.

The Internal Revenue Service is increasing the use of data analytics, research and new compliance strategies, including personal visits, to reach taxpayers and tax return preparers who have not filed their federal income tax returns. In addition, the IRS has recently announced that in an effort to increase tax compliance and further enforce the law, it will visit more taxpayers who haven’t filed tax returns in prior years than they have in the past.

The goal of these strategies is to bring delinquent taxpayers into compliance with their tax filing and payment obligations and to promote future tax compliance.

To further promote voluntary compliance with tax laws, the IRS is also implementing new ways to leverage existing processes and systems, including:

  • Automated Substitute for Return program (ASFR). This affects individual taxpayers who have not filed their income tax returns, but whose available income information shared with the IRS indicates a significant income tax liability. As part of the ASFR program, the IRS sends out a single notice to these taxpayers alerting them of the potential tax liability.
  • Automated §6020(b) process. Promotes employment tax filing compliance by identifying business taxpayers who have not filed their employment tax returns for a specific period of time. Ensuring businesses comply with their employment tax filing and payment requirements is another high priority for the IRS’s efforts to reduce the Tax Gap.
  • Delinquent Return Refund Hold program (DRRH). When an individual taxpayer’s account has at least one unfiled tax return within the five years surrounding a tax return generating a tax refund, the IRS systematically holds on to that taxpayer’s income tax refund.
  • In addition, the IRS is also working with key partners to better educate taxpayers and tax professionals on filing requirements.

We know statistically that individual taxpayers fail to report about 55% of income from sources for which there is no information reporting, such as sole proprietorships. In contrast, only 5% of income from easily verified sources—interest, dividends, and pensions—ever goes unreported. For income subject to both information returns and tax withholding, such as W-2 wages, only about 1% goes unreported.

Millions of people for whatever reasons have not filed their tax returns. The Tax Gap is a term used for taxpayers who have failed to file their tax returns.

The Tax Gap each year is estimated to be in the billions. Some estimates have it at $5 billion. The IRS is on a mission to reduce the tax gap.

Mostly, there is a fear of filing because of what the IRS will do to them.

We can file the delinquent tax returns, take care of the back taxes and start working on your IRS problems today.

The Internal Revenue Service released a new set of tax gap estimates.The tax gap is defined as the amount of tax liability faced by taxpayers that is not paid on time. The new tax gap estimate represents the the IRS full update of the report in five years, and it shows the nation’s compliance rate is essentially unchanged from the last review.

The tax gap statistic is a helpful guide to the scale of tax compliance and to the persisting sources of low compliance, but it is not an adequate guide to year-to-year changes in THE IRS programs or to year-to-year returns on THE IRS service and enforcement initiatives.

THE VOLUNTARY RATE

The most recent the IRS tax gap report was released in 2019 and covered tax years 2011–13 (THE IRS Research, 2019). 

Failure to file a tax return (nonfiling) and underpayment of reported taxes accounted for 20% of the gross tax gap.

The voluntary compliance rate for tax years 2011-2013 is statistically unchanged from the most recent prior estimate of 81.7% calculated for tax year 2006

The tax gap can be divided into three components:

  • non-filing,
  • under reporting and
  •  underpayment

Under-reporting across taxpayer categories accounted for an estimated $352 billion of the gross tax gap from tax years 2011 through 2013 (80 percent), of this, 70 percent was from individual tax returns and 11 percent was from corporation income tax returns.

Overall, compliance is highest where there is third-party information reporting and/or withholding. For example, most wages and salaries are reported by employers to the IRS on Forms W-2 and are subject to withholding.

As a result, a net of only 1% of wage and salary income was misreported. But amounts subject to little or no information reporting had a 56% net misreporting rate in 2006.

THESE ARE THE IRS PROBLEMS WE CAN HANDLE:

  • Backs taxes;
  • Unfiled tax return or missing tax returns;
  • Non-filer situations;
  • Missing tax records;
  • Resolution so no enforcement action is taken;
  • Amended tax returns.
  • We get your file closed with the IRS so the tax problem is no longer a major stress.

WHAT HAPPENS IF I HAVE NOT FILED IN OVER 10 YEARS? AM I IN TROUBLE?

Our team has been dealing with these situations for many years and have handled thousands of cases. The IRS wants your back tax issues cleaned up and the unfiled tax years filed. Non-filers and unfiled tax returns are a huge issue for the IRS. We can make this happen so you can sleep at night and take the fear and stress out of your life.  We will:

  • Secure a power of attorney, so you don’t have to talk to the IRS;
  • Obtain a full transcript of the IRS records so we know how the IRS will handle this case;
  • Contact the IRS and handle the resolution of your tax problem;
  • File the income and payroll tax returns;
  • Negotiate a settlement with the IRS and close your case.

We are some of the country’s leading experts in unfiled returns, back taxes, missing returns

Individual taxpayers failed to report about 55% of income from sources for which there is no information reporting, such as sole proprietorships. In contrast, only 5% of income from easily verified sources—interest, dividends, and pensions—was unreported. For income subject to both information returns and tax withholding, as with wages, only about 1% went unreported. Updated May 2020

No matter what the reason you’ve fallen behind on your tax returns, we can help you get back on track.

Here is how “THE PROCESS” WORKS for FILING YOUR LATE, BACK OR UNFILED TAX RETURNS.

1. Try to obtain all your back 1099’s or W-2’s. Also get copies of all your bank statements for the tax years not filed. This will give you your total income for the years involved.

2. You should, to the best of their ability, reconstruct what you think are your tax earnings and expenses for each year. You can do this simply by using monthly averages for each of the years. As an example, how much was one month of your rent or mortgage, your car expenses, your food, your insurance etc. Arrive at a monthly figure and multiple it by 12. As a general rule, your rent or mortgage is usually about 28% monthly expenses.

3. If you have bank statements, what were your total deposits for the year? Match this up with what you are claiming as total income.

4. If you have absolutely no records, call the IRS and ask them for an income report record of all third parties that have reported to the IRS. The IRS keeps this information on their computer system: a list of all third party sources that have reported 1099 or W-2 income paid to you. The IRS will send this to you within a couple weeks of your request.

5. Ask yourself, ‘does this return make sense?’ The IRS knows how much it costs to live in each area of the country. Your tax return must reflect your lifestyle and conditions over the period of time in which you are filing. Do not round numbers to zero–that’s a BIG no-no!–and do not use a pencil to complete a paper-filed income tax return.

6. Prepare your income tax return and send it to the closest regional IRS office to your primary residence.

7. If you are going to owe money, still file your tax return and contact us to find out what type of settlement works best for your unique tax situation It is always best to hire a trusted professional tax firm to handle this type of situation. In particular, our firm knows the standards and the methods used by the IRS – since our team members have 80-plus years combined  experience working for the IRS. If you owe tax, we can probably work out a tax settlement for you as well. So if you have back, unfiled, or past due tax returns,  call Joshua A. Webskowski, EA, USTPC and his team of former IRS Revenue Agents, Revenue Officers and IRS Trainers today at 763-477-4205.

 

What happens if you lost your W-2s or 1099’s?

If you lost your W-2(s) or 1099(s), call the business that you would have received them from. Ask their payroll department for copies. Typically businesses (your employer, banks, stock brokerage etc) will retain these records for 7 years.

If the business is out of business or did not keep copies of your W-2(s) or 1099(s), you can call the IRS at 1-800-829-1040 and ask for a printout of that data for the year(s) that you did not file. Although the IRS cannot provide you with the actual W-2s or 1099s, you will at least have enough information for your baseline tax amount to report on your income tax return. THE IRS keeps these income reports on record for 7 years. You will be asking the IRS for your income reports.

 What are the different ways the IRS may contact you if you did not file

The IRS starts off by sending you a letter or notice in the mail at the last known address that they have on file for you. The IRS letters (or what the IRS calls CP for collection process notices) may let you know that they have no record of your tax return.

If you do not respond to these letters, then the IRS may follow up with a phone call or a letter telling you that you have 30 days to get your returns filed.

If you fail to take corrective actions, stepped-up processes will take place. If the IRS cannot get you to file through telephone call or letters, you will get a visit from a Revenue Officer.

At this point the case will be assigned to the local office to close the case. If you did not file after this, the IRS will file your tax return for you. This is called SFR or Substitute For Return.

IF THE IRS FILES A TAX REUTRN FOR YOU, THIS IS CALLED A SUBSTITUTE FOR RETURN OR SFR

If the IRS files a Substitute For Return tax returns, they are prepared and filed pursuant to authority granted the Internal Revenue Service by IRC §6020(b) which authorizes the IRS to prepare an individual income tax return on behalf of a non-compliant taxpayer.

In most cases, the Automated Substitute for Return (ASFR) system is used to evaluate the IRS Master File on the IRS CADE Computer and prepare an SFR for a wage earner or taxpayer without other unresolved taxpayer delinquent accounts. The IRS will not do this unless they have repeatedly and unsuccessfully tried to contact you.

 In order to conserve manpower and financial resources, tax cases having the following criteria will generally be handled by the ASFR system:

1. The taxpayer is not self-employed;

2. Total income is less than $100,000; larger cases will be referred to audit,

3. The income shown on the IRS Information Reporting System totals more than 75% of adjusted gross income and total positive income on the taxpayer’s last filed return;

4. The tax year in question is no older than six years prior to the current tax year;

5. There is no current or pending “uncollectible status” on the account nor is there a Criminal indicator on the account.

6. The taxpayer’s address has been verified.

If these conditions do not exist, the matter will be sent to a Revenue Officer in the local field office closest to the taxpayer’s primary residence to review and obtain pertinent information prior to referral to the Exam Division for creation of an SFR for the taxpayer. The Revenue Officer also has the option to do the SFR. When some of our team membesr worked for the IRS,  often times they personally filed SFRs for the non-compliant taxpayers.

 Do I still need to file even if I do not owe the IRS?

No!!! Filing is not necessary if your earned income is less than the standard deduction for your filing status.

Are Tax Penalties Deductible on Tax Return?

No, not on your life. Neither are speeding tickets.

Where do I send late, unfiled or back tax returns to the IRS?

You can find a list of local THE IRS offices by visiting IRS.gov.

Get the Back Tax Help You Need

Resolving tax issues with the IRS is often a frustrating and time-consuming task for non-professionals. Our team of tax professionals can help you pay your back taxes. Give us a call to see how we can help you!  763-477-4205

Don’t wait for the IRS or your State to contact you, because it’s not in your best interest to let the IRS or your State Department of Revenue prepare a tax return for you.

The IRS will use the highest tax rate when they prepare your unfiled Delinquent Tax Returns for you.

If the Internal Revenue Service has not yet notified you, they will catch up with you sooner or later.

Computers are becoming more sophisticated with technology and the sharing of data becomes more commonplace, the faster it will be.

The IRS may also seek to impose a criminal offense for failure to file tax returns as required.

Even if you do file, the tax returns must be accurate and truthful because if false returns are detected by the IRS, a fraud referral to the Criminal Investigation Division will be generated.

Failure to file returns is illegal and a FELONY, and subject to criminal and civil penalties.

This means that you can go to prison, pay substantial penalties, and be financially destroyed.

Willful failure to file returns can result in a punishment of one year in jail and a $25,000 fine ($100,000 in the case of a corporation).

Under certain circumstances, if you have not been contacted by the Internal Revenue Service already, it may be possible to file your returns without criminal penalties and obtain tax relief.

When you do file, you must prepare and file tax returns that are accurate and truthful as the returns will be examined by the IRS.

We can guide getting you current with your tax return filing obligations and then analyze your situation to determine the best course of action and minimize the chance of any criminal investigation.