Back Taxes & Missing Returns
Late and missing tax returns are not something you need to be scared about. It's a common problem that I help people with almost every week, and I'm happy to answer questions about it.
"I don't have any of my old tax documents - what do I do?!"
Usually I can get this info from the IRS. If you don't have your old W2s or 1099s, I can probably order them.
I do regular tax preparation in addition to being an attorney and can usually get things together fairly quickly.
"How much will it cost me to have all the missing returns prepared?"
It's usually in the $375-$850 range. I charge a base rate of $125 per year, so three years of back taxes would be $375. There may be an additional charge per year if you own a business or have rental property or something like that. Message me and we can talk about how much it will cost.
"How long will it take to get my missing tax returns done?"
Usually 1-3 days.
"How to I pay the IRS?"
The IRS is actually more flexible than you might think. If you owe less than $50,000, you can pay them back in six years, no questions asked. This would be about $150 per month for every $10,000 you owe.
If you can't afford to pay off the taxes in six years, the IRS will let you make payments based on your "disposable income." (determined using a formula of income minus rent, groceries, etc.) So if you can show that you only have $200 leftover after your mortgage and car payment and other bills, the IRS will accept payments of $200 per month.
"Can I settle with them for less than what I owe?"
Probably not. So-called "offers in compromise" have a rejection rate of about 86%.
While they are advertised a lot, "offers in compromise" don't really work and I don't recommend filing one.
"But I am never going to pay it off!!"
There is a ten year statute of limitations on the collection of taxes, so any amount not paid disappears after ten years. Even if you owe $1 million, if you can really only afford payments of $200 per month, then the IRS will accept this amount, and the remainder will fall off after ten years. This is called a "partial payment installment agreement."
"I have a 'tax lien' filed against me. What is that?"
A tax lien is a public notice that you owe taxes; it's filed with the same office that records mortgages and property deeds. The main effect of tax liens is to legally "attach" to the equity in property, so that it can't be sold without paying the IRS. Since tax liens are public records, they also unfortunately subject you to a lot of junk mail and solicitations. Tax liens also used to be used in credit scores, but they no longer are.
A tax lien is not the same thing as a tax levy, which is when the IRS seizes bank accounts or wages after sending you a formal legal Notice of Intent to Levy.
"Will I go to jail for not filing my taxes? Will they arrest me?"
No. Well, almost certainly not. Tax crime prosecutions are pretty rare and reserved for very egregious offenders. In my entire career I've only had two people who were actually prosecuted, and both of them were tax preparers accused of filing hundreds of fraudulent returns. If someone says you're going to be prosecuted for tax fraud, it's probably a scam.
You can write me to ask your own question.