Paid Tax Preparers Best Choice For People With Delinquent Tax Returns
As the IRS expands its search for delinquent tax filers, the guilty parties should not delay filing returns for missed years. Financial troubles for some individuals in recent years caused them to skip submitting tax returns until they recovered from hard times. The elapsed time now creates complications for gathering accurate income figures as well as the correct tax forms.
Fortunately, paid tax preparers can help. They possess tax software for prior years plus knowledge about qualifications for various tax credits that have changed frequently. An experienced tax practitioner has completed tax preparer continuing education each year. This study yields the details needed to request information that reduces tax liability.
Taxpayers are usually unaware of certain tax credits related to education expenses and childcare. The assistance provided by tax preparer work identifies the relevant facts. Expense records are usually available from payment recipients, such as schools and childcare providers.
Reported income of taxpayers is available from the IRS. A common tax return preparer job is obtaining a transcript of an individual’s reported income. This reveals filed documents such as W-2 wage statements, 1099s with miscellaneous income from contract work, and 1099s showing income from financial institutions.
That is the same information the IRS computers match to tax returns. When no tax return is located with the identifying number on the reporting documents, the IRS initiates a Taxpayer Delinquency Investigation. Taxpayers receiving such notices are usually spurred into action by conducting a tax preparer search.
People who ignore Taxpayer Delinquency Investigation notices risk having IRS field officers assigned to find them. The IRS is unlikely to put anyone in jail for delinquent tax returns. However, willful failure to file a tax return where taxes are owed is a misdemeanor offense carrying a penalty of up to one year in jail and a $25,000 fine. This is probably all the incentive a person needs to hire a professional with tax preparer training and file delinquent tax returns without further delay. In addition, the IRS is likely to assume a more gentle position with taxpayers that voluntarily file delinquent returns than those caught by the agency’s enforcement procedures.
The government can pursue individuals indefinitely for failing to file tax returns and impose civil penalties plus any taxes owed. However, the IRS generally does not hunt for tax returns after six years, which is the limitation for assessment of criminal charges.
Over half of delinquent tax filers hire paid tax preparers to file their late returns. This removes the complications of obtaining an income transcript from the IRS and locating tax forms for past years. Professional help also assures mistake-free tax returns. That is important because all late-filed tax returns are hand-screened by an IRS employee.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.