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I haven't filed a personal return since 2011 tax year. In…

Hello. I haven't filed...
Hello. I haven't filed a personal return since 2011 tax year. In 2013, I moved overseas, and didn't return till 2016. Can I just file my back taxes, or must I consult with tax attorney first for any implications? I have received the following letters from the IRS:
Letter 2797, Letter 729, and Letter 3164C(DO).I haven't received any notice of audit or Lien, but I do see that the IRS removed funds from a Bank of America Checking account in 2015. I don't see any Lien in any of the UCC/Secretary of State records for the states I have lived in, or the California address I received the IRS letters to. Also, I see no lien on credit report, but since have had a garnishment from my BankAmerica account, assuming I have had a levy. I'm trying to understand what I need to do at this point.
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Answered in 8 minutes by:
12/10/2017
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,223
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi. My name's Lane

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I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents, since 1986.

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You can certainly file your taxes.

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If you had taxes withheld for any of those years, you may find that the IRS assessed and levied incorrectly (they simply assume you had nothing withheld when generating a return for years not filed. By filing you'll be able to apply any withholding or estimated payments to the tax bill.

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Also, if they've not yet assessed a tax for a given year, you'll start the statute of limitations (which has never started if there's been no return filed and no tax yet assessed.

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Finally, you'll stop the accrual of any non-filing penalties.

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Being pro-active and getting them filed has several benefits, including (anecdotally, nothing in the code about this, but) their going easier on those that get to them on a given tax year, first.

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Letter 2797, commonly referred to as the “Are You There” letter, is simply an automated took that's trying to determine if that is in deed your address.

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Likely the notices required to place a tax lien were mailed to an address and returned

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Customer reply replied 5 months ago
Thanks. ***** had taxes withheld (1040 personal salary withholding for tax years 2011-2013). How can I find out if I have been assessed a tax for a given year, etc.? I believe there is up to a 25% penalty for non-filing, is this correct?I always had a tax refund, so don't anticipate differently for those years (same income, deductions, financial structuring). I just didn't want to file then get hit instantly with an audit and should have worked with CPA/Tax attorney first.Also, since lived overseas, worried about FATCA implications that I wasn't aware of, as I did have bank accounts I deposited more than 10k into (salary direct deposits).Last questions, what are the Letter 729 and Letter 3164c about? Also, why can't I find a Lien/Levy if I have had my checking account garnished from IRS?

The failure to file penalty is calculated at 5% per month for each month the return was late.

4/16/2012

IRC §6651(c)(1)

The failure to file penalty rate is reduced to 4.5% per month when the failure to pay penalty also applies.

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The failure to pay penalty is calculated at a rate of 0.5% per month for each month the failure continues..

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HOWEVER, both penalties have as their basis Tax due. SO if you withheld enough that you'd get a refund for those years, you'll HAVE no penalty (Y x 0 = 0)

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On the FACTA you MAY be able to get an abatement based on your not WILLFULLY failing to file ... That's not a guarantee, but the fact that you likely have no tax due (if that's the case even with the int or div earnings on the overseas account) they have granted this (again, when you get to them first)

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Now regarding the letters, bear with me a sec

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Customer reply replied 5 months ago
Thanks very much. Could you advise on what these other two IRS letters, 729 and Letter 3164c, are about? Both just requested for filing, but have received nothing else about a Lien, etc. How can I look up to see if an audit/action have been started? Just call the IRS?
Customer reply replied 5 months ago
Appreciated on the letters....

Letter 729 is sent To address unfiled returns.

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Notice of Potential Third Party Contact. Letter 3164,Third Party Contact Letter, does not need to be provided to a taxpayer for third party contacts if other advance notice has already been provided.

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This just ties in with the fact that you suddenly stopped filing returns and the system started kicking out the "where are you" notices

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THE 3164 indicates tat they were trying to satisfy notice requirements on asking third parties about your whereabouts

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Customer reply replied 5 months ago
Appreciated. Btw, I thought the failure to file penalty was capped at 25% of the required tax payment, not that the meter keeps running. Going since 2012 Ouch! Better hope that all my returns are refunds then...

No that's correct. it IS capped at 25%

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I just used this calculator https://www.irscalculators.com/irs-penalty-calculator#to run a quick non-pay on 1000 in 2013 and got the following:

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"The failure to pay penalty stops being computed because it reached the maximum penalty of 25%."

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Customer reply replied 5 months ago
Appreciated. What about this last part I had asked below? How can I find out my current IRS status and whether there is a Lien or Levy placed?
<I haven't received any notice of audit or Lien, but I do see that the IRS removed funds from a Bank of America Checking account in 2015. I don't see any Lien in any of the UCC/Secretary of State records for the states I have lived in, or the California address I received the IRS letters to. Also, I see no lien on credit report, but since have had a garnishment from my BankAmerica account, assuming I have had a levy.>

Yep, a levy is what happened in 2015 (a levy is a one time shot at removing $ from an account) (Garnishments apply to wages).

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If you don't see any liens filed there have been no actual liens on property filed in the county recorders office.

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A tax lien is the government's claim on your property and is generally placed when a taxpayer, such as a business or individual, fails to pay taxes owed. This does not mean that taxation authorities will seize your property, it just ensures that they get first right to your property over other creditors.

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The fact that you don't see any MAY mean that someone had an inkling that there was actually no taxes owed. You can get a wage and income.

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You can get a "wage and income transcript" here, to see information from W-2's 1099's etc that were filed with IRA by employers and other payors.

https://www.irs.gov/individuals/get-transcript

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There are several types of transcripts. Be sure to check the box for a "wage and income" transcript (while most only go back 3 years, the W & I transcript goes back none years)

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating, using the stars on your screen, and then clicking “submit" – That’s the only way I’ll be credited for the work.

I hope you’ll rate me based on my accuracy and thoroughness (as opposed to any good news/bad news content). Thank you!

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But again, if you need more on this, please let me know.

Lane

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Customer reply replied 5 months ago
Okay, I think this is a good assistance. I'll get the wage transcript, and then start my back filing. Any good site you recommend for my researching FATCA requirements?
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Best, ***** ***** but thorough, overview I've seen

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,223
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane and 87 other Tax Specialists are ready to help you
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Customer reply replied 5 months ago
Lane, many thanks. Very helpful.
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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
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