4/22/14 at 11:31 AM 0 Comments

Amending Prior Tax Returns: Don't Delay Penalties & Interest Are Piling UP

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Amending Prior Tax Returns

The filing of old back tax returns often "freezes" taxpayers who become too scared to address their open monies. Below is an example of an inquiry from a taxpayer seeking advice on filing of past unfiled income tax returns:

I'm looking for help amending back tax returns (last 5 years) and I am desperate to get my tax situation in order. I need to find help I can afford! If I'm too small a customer do you know of another resource for help with this issue? Thank you very much.

Below is my response to their inquiry:

Thanks for visiting www.HisCPA.com  I would suggest using us to get your back taxes filed. On the contact page of my website I have a checklist you can use to pull your information together to file the returns. In the interim I have recapped a bit about our business philosophy and services.

Fixing unfiled tax returns and to amend back tax returns, frequently the options look bleak, as often they are. However there is good news for those who are desirous to look "outside the box" in looking to solve your IRS tax problems. Knowing the ins and outs of varying programs will do much to help you know what is in your best interest. Please be reminded that for income tax returns cannot be amended if they have been filed for over three years. After you have amend your back taxes and got all of your returns filed with the IRS it is then time to turn your attention toward the successful payment of your open IRS obligations.

Installment plans with the IRS and your state are essentially long range, but are frequently the most convenient way to solve an IRS tax bill short term. However this option is frequently the worst option as interest and penalties continue to be assessed thus ensuring that you continue to owe even more additional monies rather than less. Form 9465 is used by taxpayers with the IRS to make an Installment Agreement Request to set up a monthly payment plan. If at all possible it is recommended that before you set up an installment plan, you look to other options available such as a loan from a bank.

Also great care should be taken to be a forward thinker when doing your cash flow and to plan long term to ensure that you will be able to fulfill the financial commitment you make in a Formal IRS Installment Plan. For example, if you owe taxes for the and have not yet filed your returns and have not yet done adequate tax planning, setting up an Installment Plan with the IRS might be one of the worst things you can do. Care should be exercised to both, get all of your back/old income tax returns filed first and then to evaluate your taxable income to ensure that you will have the taxes and monies to pay all of the tax years in question. Failing to do so can be especially problematic as one of the rules of being on an Installment Plan is that you have to stay current on all of your filings and payments for the duration of the payment period, or the IRS will void the Installment Agreement and reinstate collection efforts. Considering all of these options allows you to have a much less problematic agreement and avoid unnecessary headaches, professional fees, and additional fines, penalties and interest.

When hiring a CPA to address your back tax issues, be sure to find one who has a proven track record of addressing IRS representation/Offer in Compromise/Tax Problems, Tax Liens/Levies/Garnishments and Income Tax Preparation to make sure you have the “Whole Package” for a CPA who can help you best address your tax representation issues. www.HisCPA.com  A Duluth CPA Taking Christianity Into the World

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