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Last time I filed taxes was 2010. I am a small chimney and

stove business. No employees...
Last time I filed taxes was 2010. I am a small chimney and stove business. No employees. For the last 3 years have been in deportation proceedings. It seemed hopeless so I stopped filing and paying tax since 2010. I also did not do any bookkeeping even though I continued to be in business.
Now it seems that I am not getting deported after all, I won my case.
What is the best strategy to cut my losses with the IRS.?
What penalties should I expect.?
How can I get a clean slate with state and federal taxes.?
Would it help to close my business?
Thank you for your help.
P.k.
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Answered in 11 minutes by:
7/18/2013
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 3,852
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified
Welcome. THANK YOU for choosing Just Answer. My name is XXXXX XXXXX my goal is to help make YOUR life, a little...LESS taxing.

Hello P.K.,

Let me first congratulate you on winning your case. As for your tax issues;

Q: What is the best strategy to cut my losses with the IRS.?

A: You can't just..."cut your losses" with the IRS, you will need to file tax returns for tax years 2011, and 2012 and pay any taxes that are due.

-----------------------------------------

Q: What penalties should I expect.?

A: You can expect to pay failure to file and failure to pay penalties. You can refer to the following link for more detailed information on those penalties;

http://www.irs.gov/uac/Failure-to-File-or-Pay-Penalties:-Eight-Facts

------------------------------------------

Q: How can I get a clean slate with state and federal taxes.?

A: By filing the returns for tax years 2011 and 2012 and paying any taxes that are due. If you are unable to pay your balance in full, then you can request to be placed on an installment agreement payment plan. Keep in mind you will need to file state taxes as well if you are in a state that imposes tax on personal income.

--------------------------------------------

Q: Would it help to close my business?

A: If you have a tax liability, closing your business will not make that liaibility go away. You will still be responsible for paying any back taxes that are due.

Please let me know if I can be of further assistance to you regarding this matter.

Thank you again for using JUST ANSWER.

Ask Your Own Tax Question
Customer reply replied 4 years ago
What if I cannot determine my income, I kept no records of the business, I only have bank statement showing money coming in. Who should I use to help me with this?
Hello again,

Since you did not keep track of your income and expenses, you can use the bank statements to estimate your income. As for your expenses, if you have paid invoices or other documents that substantiate the expense, you can use those to determine your expenses. Once you determine your estimated income and expenses for each year, any reputable tax professional can assist you with prepping the returns. It is a matter of prepping the returns and sending them in. You will have to mail a paper copy of the tax return for tax year 2011, but for 2012, that one can be efiled.

Please let me know if this clarifies matters for you.
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 3,852
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
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