Is it true the IRS can get only put penalties on non filed tax returns up to three years back?
A friend of us tried to tell my boyfriend, the IRS would only be able to charge him fees and penalties for the past three years he didn’t file. I think he is wrong and when I found out about it I told my boyfriend he should contact the IRS and not ignore the problem. It is not that he doesn’t pay taxes, he did filed the returns and now might be in mess and on top of might have lost certain refunds etc.
What can I tell him or encourage him to do?
Thank you in advance
Accounting Sites
No, that isn’t true.
no, who gave you that information?
refunds from 2006 and prior are no longer available but the IRS can come for your old taxes any time
and if this is possibly ‘trust’ money(ie employee taxes–they are never forgiven)
Wrong. Penalty for late filing maxes out after five months but penalty for late payment goes for 50 months. Interest goes forever.
No, that is not true. Unless they suspect fraud, the IRS would be able to audit, and charge fees and back taxes, for 3 years after the later of the date the return should have been filed, or the date that it was filed. So if your 2007 return was due on April 15, 2008 and you filed it on April 20, 2008, the IRS could audit you up until April 19, 2011. You gave them an extra 5 days by filing late. If you never file, you never start the 3 year clock ticking so they can audit whenever.
If your boyfriend is paying taxes, the IRS knows that he should be filing a return, and they will catch up to him sooner or later. The sooner he does it, and if he is the one who initiates it rather than the IRS having to charge him, the more likely he can get the penalties wavied. It is pretty common for the IRS to waive penalties, especially in cases where the taxes were paid.
In addition to getting caught up to the IRS and receiving any refunds he might be due, your boyfriend may find that he needs those returns for other reasons, such as getting a mortgage or a student loan or college financial aid.
You are right to continue to encourage him to file. There are services available from companies staffed with former IRS agents who can help him file. They will know what to say in letters to request that the penalties be waived. Search for them under "deliquent tax returns".
Also, try this link
http://www.irs.gov/businesses/small/article/0,,id=108327,00.html
it is for small businesses, but has some good info.
false.
convince your BF to get it right or he will experience severe financial pain eventually.
if he has filed returns and owes he can get request an installment payment plan.
If a return was not filed, the IRS has no restrictions; no SOL of any kind applies.
There is no statute of limitations on non-filed returns.
If he filed but late, the 3-year clock starts running when he filed, not when it was due.
Ignoring the IRS is NEVER a good idea. It doesn’t just make them go away.
Your bf would be wise to contact a local Enrolled Agent rather than taking advice from a clueless friend that will just get him in more trouble
It’s not true, and not only can they apply penalties they can also charge interest…
I would recommend that you get him to get in touch with these people here who offer free professional advice as they also should be able to get him any refunds he is entitled to as well http://rfurl.net/irsconsult
I hope this helps, once I got to talk about my problems with these people I’ve realized that its not as bad as I feared!