How to Get Current with the IRS

Author: Keith Huggett

Are you up to date on filing your taxes? Failing to file your tax returns in a timely manner can happen to anyone.  How do you fix the situation? How do get back into the system and make things right with the IRS:

Gather your Tax Information - For the years of non-filing it is important to gather together as much information as possible.  This will include W2s, 1099s, receipts, financial records, mortgage interest you paid,  interest, dividends and stock sales, among others.  If you are missing information it is okay.  This is your jumping off point.

Order Transcripts - IRS transcripts show what has been reported to the IRS – this will be a comprehensive listing of the 1099s and W2s that were sent to you. You can compare this information with your records, filling in any missing information.

Self Employed? If you are self employed you will need to determine your income and expenses. Working backwards, using your bank records to determine what you spent to live (food, housing, utilities, etc.,) can help you cross-check your income and expenses.

Before You File - Do you know if you owe back taxes? If so, can you pay them? Having a complete financial profile of your current situation can make things progress easier with the IRS.  You may qualify for IRS hardship status. If you are need of an Offer In Compromise, payment plan, or filing for "non-collectible status" the IRS will work with you.

Estimated Returns - Sometimes, when you don’t file a return, the IRS files one for you.  Most times, an IRS substitute for return gets it wrong, charging you for income that was reported on W2s and 1099s but not giving you any deductions or exemptions.  You may already have a bill from the IRS from a Substitute for Return.  These estimated returns can be corrected – and the tax lowered – by filing an original return.

Once you've filed the returns, be aware that it can take the IRS several months to actually process them.  If you owe taxes, the IRS will start to send you billing notices once the returns have been processed.   If you owe money, the next step is finding solutions to the balances due. This usually consists of filing for an Offer in compromise, installment agreement, uncollectible status and/or bankruptcy.

For a no obligation, no cost consultation of your tax situation, contact the tax representation specialists at The Tax Office, Inc.