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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 585
Experience:  10 years experience
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I haven't filed my fed or state taxes in several years. I

Customer Question

I haven't filed my fed or state taxes in several years. I have, however, had taxes taken out of my paycheck, so it's just a filing issue. I've heard that federal budget issues have slashed personnel from the IRS, so other than an occasional letter that I don't open, no one is coming after me. I'm concerned that if I start filing now, I will be on the IRS radar and then I will get in a lot of trouble for all those years of not filing. My husband has filed separately since we got married, and the IRS requires my info for that, so it's not like they don't know anything about me. I don't know if I can afford to hire an attorney. Suggestions?
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.
Hi. My name is ***** ***** I will be happy to help you. IRS may have slashed personnel but heavily invested in technology and processing. Those days 90 - 95% or returns are processed by computers and require only very limited human interaction. All tax forms you received from your employer, social security administrations, banks or retirement fund are automatically electronically send to IRS as well, so almost instantly they will show up on your IRS account. IRS know about you and your income. If your income was bellow filing requirements you were not required to file and you will be OK. But if you make more than the minimum filing requirement or you are subject to penalty for early withdrawal from your 401K for instance and you don't file, usually within 6 month you get a letter. You will usually have 30 days to respond. If you ignore it, you will receive another one and you will get 60 days to do something about it. At that point IRS initiate a collection process, put a lean on your property ( it will show up on your credit report as well) and if you ignore it long enough, levy your bank account or even your social security check if necessary. You don't need an attorney, unless you are under criminal investigation for a tax fraud or did something illegal. All you need is a good tax professional who can help you to file your returns and advice you about tax laws that may affect your future filings.
Customer: replied 1 year ago.
Thank you for your response. However, it sounds more as if you are writing for a wider audience than for my specific question. You wrote about people who owe taxes, not about someone like me whose taxes have been properly withheld but who have not filed tax returns. I do not expect to owe taxes; I just haven't filed to get a refund. What sort of "a good tax professional" would I need to "help [me] file [my] returns"? I consider myself quite capable of completing a 1040; I had thought that I might need an attorney to negotiate things with the IRS so I could get non-filing penalties waived, especially if I would be due refunds for past tax years. And since tax filing season is almost over, I'm concerned about how filing all of a sudden after I haven't filed for several years would affect my situation.
Expert:  emc011075 replied 1 year ago.
You do not know if your taxes were properly withheld until you prepare your tax return. It is a common misconception that if your employer is withholding taxes from your paycheck you are safe and don't have to file a tax return. Withholdings are only estimates and your employer only withhold how much you tell him to withhold (when you fill out your w4 form). While it is true that you will not be penalize if you do not owe, you may still be required to file a return in some circumstances. Especially with married filing separate status there could be some surprises, for instance if you husband itemize his deduction, you will have to itemize your deduction as well, even if your itemize deduction is much lower than your standard deduction. Several credits are not available for married filing separate filing status.If you are capable preparing your own tax return and it is not overly complicated than I would suggest to do so as soon as possible.Regarding the attorney, it is your choice if you want to pay somebody fortune to do simple services an experience tax professional can do for much less. No attorney can negotiate anything with IRS. IRS is government organization and do not negotiate with private lawyers. The rules are same for everybody, you file required paperwork, wait for the respond and if you don't agree you appeal. If you still don't agree you go to tax court or request a private letter ruling. Even at this point you still don't need a lawyer. We represent our taxpayers before IRS or during tax court ruling all the time and we do not have a single attorney on staff. All of us are IRS licensed enrolled agents. (http://www.naea.org/) But before you can even think about any penalty relief you have to file all your missed tax returns. If you do not owe anything, there are no penalties. Penalty is always calculated on the balance due, if there's no balance due, there's no penalty.Now regarding the refunds, there's a 3 year statute of limitation for claiming a refund. It means, you can still file your 2012 tax return before April 15 and claim your refund. It is too late for any prior years and no attorney will get you those refunds back.Not everybody is required to file tax return every year. But if you are required to file and you don't do, usually after 3 years IRS will file a substitute return for your, no deductions, no credits. You will get notified if you owe and you will get a bill. After that IRS initiate a collection process as I described before.