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  • Writer's pictureCathy Nedd

Unfiled Tax Returns and Back Taxes: Resolving Your Tax Obligations

Unfiled tax returns and back taxes can cause significant financial and legal issues for individuals and businesses. If you find yourself in this situation, it is crucial to understand the consequences and take steps to resolve these tax obligations promptly. Law Office of Markwei Boye, PLLC, a trusted name in tax resolution, offers expert assistance in addressing unfiled tax returns and back taxes.


Unfiled Tax Returns


Unfiled tax returns are a serious offense in the eyes of the IRS and can lead to mounting debt as back taxes and fines accumulate. The IRS will not halt the collections process until all unfiled tax returns have been submitted, and the tax liabilities have been addressed. It's important to note that the IRS is aware of unfiled tax returns, and they can notify you at any time, ready to aggressively pursue back tax payments.


Filing your unfiled tax returns is the best course of action to stay out of trouble with the IRS. If the IRS files a substitute for return (SFR) on your behalf, it is based on their best guess of your income and will include penalties and fines. Filing your back taxes before the IRS files an SFR gives you the opportunity to claim deductions and potentially reduce the overall tax liability.



Criminal Consequences and Loss of Refunds


Unfiled tax returns also carry criminal consequences. The IRS can eventually criminally prosecute individuals who fail to file their tax returns. Claiming an inability to pay the tax bill is not an acceptable defense, and the IRS can assess additional fines and penalties for failing to file a tax return.


Furthermore, any potential tax refunds you may have been entitled to in the years with unfiled tax returns are lost. After the three-year statute of limitations, the U.S. Treasury retains ownership of the refund, and overpayments cannot be applied to other years. Delaying the filing of tax returns never improves the situation; it only worsens it.


Settling Back Taxes


If you are struggling with back taxes, you are not alone. Millions of people owe back taxes and live in fear of the repercussions. The first step to settling back taxes is to proactively contact the IRS before they contact you. Contrary to popular belief, negotiating with the IRS is possible, and there are options available.


One option is the Offer in Compromise program, which allows eligible taxpayers to settle their total tax debt for less than the amount owed. This program takes into account the taxpayer's ability to pay and offers an opportunity for a fresh start.


Reducing tax penalties is another strategy when dealing with back taxes. Demonstrating to the IRS that you are unable to pay the penalties in full can lead to a reduction in the total amount due. However, it's important to note that interest on penalties will still accrue.


If you are going through economic hardship, the IRS offers the Currently Not Collectible (CNC) status. By proving your situation, you can temporarily halt IRS collection efforts. It's essential to periodically re-qualify for the CNC status.


If you cannot afford to settle your back taxes through an Offer in Compromise or the CNC program, the IRS may offer a tax payment plan. This allows you to make monthly payments towards your tax debt, making it more manageable.


Preventing Wage Garnishment and Bank Levies


Failure to address back taxes can lead to severe consequences, such as wage garnishment and bank levies. The IRS can notify your employer about your tax debt and require them to withhold a portion of your paycheck, leaving you with little to cover your living expenses. Bank levies freeze your assets, including funds in your bank account, and can significantly disrupt your financial stability.


Working with a reputable tax firm like Law Office of Markwei Boye, PLLC can help prevent wage garnishment and bank levies. They can negotiate with the IRS to establish an installment plan that allows you to make affordable monthly payments toward your tax debt. An installment plan can often be settled for less than the total owed, resulting in a quicker resolution.


If you are facing economic hardship and cannot make payments to the IRS, you may be eligible for the Currently Not Collectible status. This stops IRS collection efforts, including wage garnishment and bank levies, for a temporary period. However, you will need to periodically prove your financial situation to maintain this status.


Expert Assistance from Law Office of Markwei Boye, PLLC


When facing unfiled tax returns and back taxes, seeking professional assistance is crucial. Law Office of Markwei Boye, PLLC has decades of experience in dealing with the IRS and helping clients resolve their tax obligations. Their team of knowledgeable tax professionals and IRS Tax Resolution Attorneys understands IRS policies and procedures and can navigate through the complexities to find the best resolution for your specific situation.


By contacting Law Office of Markwei Boye, PLLC, you gain access to expert guidance and representation throughout the process. They will analyze your financial records, negotiate with the IRS, and develop a personalized strategy to address your unfiled tax returns and back taxes effectively.


Resolve your tax problems today and regain control of your financial future. Contact Law Office of Markwei Boye, PLLC for a consultation and take the necessary steps to achieve a favorable resolution.


Note: The content above includes information and phrasing from the provided website page (https://www.markweiboye.com/irs-services).

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