Best Time To File Old Taxes? NOW!

Believe it or not, the percentage of the taxpaying population who files late or doesn’t file at all is substantial.  There have been several statistics that indicate that eleven to fourteen million taxpayers fail to file their returns on time.  This could mean they do it months, if not years after the April 15th deadline.  The reasons for filing late are all across the board.  They range from forgetfulness and confusion on what to do to, all the way up to not sure how to pay a balance, to destruction of records.  No matter what the reason, we’re going to discuss why now (through say 2021) is the best time to file those old tax returns you’ve been putting off.

Covid-19 has slowed down IRS operations and processing times.  When the Internal Revenue Service (IRS) machine is humming along in a “normal” year, its computers are busy spitting out letters to taxpayers, and its personnel attempt to collect tax debt from delinquent taxpayers.  This includes audits, site visits, revenue officer contact and a host of other things.  The IRS is not “fast” in the best of times and now, due to Covid-19, their operations are severely impacted.  For example, from March through July 2020, the IRS computers were offline and NO mail sent to the IRS was opened.  All of the above can give you “more” time to address your situation.  Meaning, it can give you time to:

  • Get the documents needed to have the old tax returns prepared.
  • Allow you to prepare all the returns at once for submission.
  • Determine if (or how much) you owe the IRS and come up with a game plan to deal with it.
  • Mail or electronically file the returns with the IRS and then wait for them to catch up and respond.

If you only filed a 2018/2019 tax return for a stimulus check, but have other unfiled returns, you just put yourself back on the IRS’ radar.  Those who filed tax returns but have other unfiled tax returns, just “raised their hand” so-to-speak with the IRS.  Essentially, that person has now told the IRS 1) that they are still around and 2) where to send the letter asking about those other unfiled years.  It’s only going to be a matter of time before they reach out to you about those missing returns.  Best to use this time to perform the steps outlined in the bullet points above!

If you owe the IRS, the sooner you file, the sooner the 10 year clock for them to collect starts running.  Many taxpayers, and some practitioners, are unaware that the IRS by law only has 10 years’ time to collect a tax debt. This is referred to as the statute of limitations or in IRS speak, the Collection Statute Expiration Date or CSED for short. The 10-year period begins to run with the date of the “assessment” of the tax, not the tax year for which taxes are due. For example, if a return for 2017 is not filed until 2020 and the tax is assessed in 2020, the 10-year period begins to run in 2020 and expires in 2030.

If you’re not working or have a reduced income due to Covid-19, it could result in a “deal” with regards to your tax debt.  When it comes to settling ones tax debt, it all comes down to the IRS term referred to as reasonable collection potential or RCP.  The RCP is how the IRS measures the taxpayer’s ability to pay on the taxes they owe.  It includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. The RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.  It is the last point that can get you a deal during these “unprecedented times” we will be facing until about 2021.

You see, if you have no assets and your income is reduced, your RCP could be $0 or even negative once the IRS factors in those allowable expenses.  If your RCP is in fact $0, then that means that you won’t have to pay them anything (at the moment).  Why?  Because the IRS will place your account into Currently Not Collectible (CNC) status.  But what is also good about not having income coming in at this time is that you may be able to settle all your tax debt via an Offer In Compromise (OIC).  The OIC program allows eligible tax debtors to pay the IRS an amount of money that is less than what they owe in order to wipe out their entire tax liability.

Now is the perfect time to “reset” your life and taxes.  Covid-19 will force some people to hit “rock bottom” so to speak.  But this is the best time to reset your life, get rid of the past and move forward.  Why?

  • When you hit rock bottom, you let go of everything. You start again with nothing and get rid of all the stuff in your life that doesn’t make sense.
  • Pain is the momentum and the motivation you’ve probably needed to make you actually deal with your tax situation once and for all.
  • Rock bottom is where your gratitude increases ten times, if not more. That’s because life is a battle and it’s not easy.  It’s not meant to be a walk in the park, but it can be so much better when you appreciate all that is around you.

Need help filing those old tax returns?  Why not make today the day you FINALLY deal with those old tax returns?  Why not take the first step to getting that IRS monkey off your back?  Take the first step RIGHT NOW and call our office or shoot us an email via the signature in our footer.  We can help you get any missing documents, file your returns and even deal with the IRS debt should you owe back taxes.  Trust us, you’ll feel much better once you put this behind you!

Deadline Extended to Claim Refunds for 2016 Tax Returns

Time is running out to file your 2016 tax return!

If you did not file a tax return for 2016, you may be one of over 1 million taxpayers who may be due a refund from that year.  The deadline for you to claim a refund, on a tax return in which one was owed to you, is 3 years from its due date (excluding extensions).  For example, if you were due a refund on your 2016 Income Tax Return (which was due April 15th 2017), you would have until April 15th 2020 to claim it.  If you don’t file a claim for a refund within three years, the money becomes property of the U.S. Treasury!

Due to the Covid-19 pandemic, the IRS has extended the time to claim refunds related to 2016 until July 15th 2020.

Note, there is no interest or penalty for failing to file a return in which a refund was owed.  However, if you have a balance due, those items can be pretty stiff as outlined in this post.

Here are some of the facts you need to know about 2016 unclaimed refunds:

  • The unclaimed refunds apply to those who didn’t file a federal income tax return for 2016.
  • Some people, such as students, part-time workers or seasonal employees may not have filed because they thought they had too little income to require filing a tax return. However, if you did not have a filing requirement, you may still have a refund waiting if you had taxes withheld from your wages.  A refund could also apply if a taxpayer qualified for certain tax credits, such as the Earned Income Tax Credit.
  • The law requires that you properly address, mail and postmark your tax return by July 15th 2016 to claim your refund.  2016 returns CAN NOT be e-filed as they are not one of the 3 active years currently supported by the IRS Modernized E-File (MEF) system.
  • The IRS may hold your 2016 refund if you have not filed tax returns for 2017 and 2018. The U.S. Treasury will apply the refund to any federal or state tax you owe. It also may use your refund to offset unpaid child support or past due federal debts such as student loans.
  • If you’re missing Forms W-2, 1098, 1099 or 5498 for 2016, you should ask for copies from your employer, bank or other payer. If you can’t get copies, get a free transcript showing that information by going to IRS.gov. You can also file Form 4506-T to get a transcript.

Need help filing that 2016 tax return?  Give us a call or visit the main page of our site and shoot us an email via the address in the footer.  We have the software to file tax returns going all the way back to 2002 so we’re sure we can help you out with 2016!

What is the IRS Matching Program?

When a taxpayer earns income, the issuing party will provide them with an IRS form. This may include a Form W2, Form 1099-MISC, Form 1099-DIV, Form 1099-INT, etc. The key thing to remember is that not only does the taxpayer receive this form, but so does the IRS. Well, at some point in time, the IRS runs “checks” to make sure that the income reported on these forms “matches” what is reported on the tax return. If there is a mismatch? Well, let’s just say that the IRS will send you a “love letter” bringing the discrepancy to your attention.

Understanding upfront matching

With this program, the IRS scrutinizes income reporting before issuing a taxpayer’s refund via the following steps:

  1. The IRS receives a tax return.
  2. The IRS matches the return against Forms W-2 and/or Forms 1099 that the IRS has received.
  3. If everything matches between the return and the information statements, the IRS releases the refund.
  4. If the IRS finds a mismatch, the IRS freezes the refund and sends a notice to the taxpayer asking for more information to prove their income and withholding.

Understanding CP2000 matching

When a tax return’s information doesn’t match data reported to the Internal Revenue Service by employers, banks and other third parties, the IRS will send a letter to the taxpayer. The letter is called an IRS Notice CP2000, and it gives detailed information about issues the IRS identified and provides steps taxpayers should take to resolve those issues.

This isn’t a formal audit notification, but a notice to see if the taxpayer agrees or disagrees with the proposed tax changes. Taxpayers should respond to the CP2000, usually within 30 days from the date printed on the notice. If a timely response can’t be made, taxpayers need to call the toll-free number shown on the notice and request additional time to respond.

The key thing to note is that CP2000 matching doesn’t typically happen immediately unlike upfront matching. In fact, it often happens months (if not almost a year) after a tax return is filed. Let’s take a look at a 2017 tax return as an example shall we?

A tax year 2017 return was due April 15th 2018, but could have been extended until October 15th 2018. During the early part of 2018, the payor’s of income (e.g. employers, banks, etc) send their corresponding IRS forms to the IRS. These in turn, populate the Wage & Income module associated with a taxpayers account (i.e. SSN or EIN) all the way until December 31st 2018. Once the extension deadline passes (10/15), the IRS matching program will begin to “flag” unreported/under-reported income between October 2018 and March of 2019 via a code 922 on the Wage & Income transcript (i.e. review of unreported income). The IRS will then send taxpayers CP2000 notices between March and October of 2019!

The income matching and CP2000 timeline illustrated

What Can You Do?

To avoid a mismatch, make sure that you report all of the income that is reported on the IRS forms that you receive. If you are working with a tax advisor, make sure that you give them all the documents you receive so they can file an accurate return and report all income received in a tax year. In addition, if you discover a tax return error, make sure to amend the return as soon as possible to avoid penalties or audits.

Need Help With a CP2000 Notice of Amending A Return?

We routinely assist taxpayers when they need help “fixing” a return. Furthermore, since we deal with filing old tax returns, we have the software to go back up to 10 years if needed!  So, if you need help, give us a call now via the number above or shoot us an email via the address in the footer on this page. We can help you address your letter and correct your return in as little as 48 hours.

How Late Can You File A Tax Return?

April 15th is the annual deadline for most people to file their federal income tax return and pay any taxes they owe. But what happens if you can’t file on time? What happens if you file your return after the due date? If you were owed a refund, can you still receive it? This post will answer all of the above questions and then some.

Annual Due Date For Filing Return. Everyone is pretty familiar with the date of April 15th here in the US. This is “Tax Day” or the date that most people are required to file their Form 1040 U.S. Individual Income Tax Return. While this date may move slightly from year to year (due to local holidays) note that it is actually mandated by law. 26 U.S. Code § 6072 actually stipulates the due dates for individual and corporate tax returns.

Can’t File By Due Date? By law, the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline. Now, one way to avoid the late filing penalties is to file an extension. Filing Form 4868 Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, will give you an extra 6 months for you to file your return and have it be considered on time. Now, if you owe money, that is still due on April 15th. If you fail to make a payment by then, you will still be subject to the late payment penalties noted above.

Filing After Extension Due Date? If you file after the extended due date, then one of two scenarios occurs:

  • You had a balance due and are now subject to the late filing and late payment penalties
  • You have a refund and are NOT subject to any penalties, but the clock is now ticking for you to claim your refund or lose it.

3 Year Deadline To Claim Refund 26 U.S. Code § 6511 outlines that a taxpayer basically has 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, to claim their refund. So while you won’t pay any penalties for late filing a return in which you were owed a refund, know that you generally only have 3 years to claim it. What happens if you don’t file by then? Well, that refund becomes the property of the US Government and you lose it forever!

What If You Don’t File Voluntarily If you fail to file file a tax return, the IRS may file a substitute return for you. This return might not give you credit for deductions and exemptions you may be entitled to receive. The return the IRS prepares for you will lead to a tax bill, which if unpaid, will trigger the collection process. This can include such actions as a levy on your wages or bank account or the filing of a notice of federal tax lien.

Need Help Filing Your Past Due Return? For filing help, you can call the IRS at 1-800-829-1040 They can help you obtain wage and income information to help prepare a past due return. If you don’t want to speak to anyone at the IRS, you can obtain your transcripts electronically by using the IRS’ Get Transcript tool to request a return or account transcript. You can also get tax forms and instructions to file your past due return by calling 1-800-Tax-Form (1-800-829-3676).

Now, if you would rather avoid all of the above and have a service file your tax returns for you, we’d be more than happy to help. Just go to this page to get started and you can be filed in as little as 24 hours!

How To File Old Tax Returns

Even in the dead of winter, we'll file your old taxes!

Even in the dead of winter, we’ll file your old taxes!

If you’ve missed the April 15th deadline but for whatever reason, you STILL need to file your tax return, you might be a little confused as to what to do.  Do you need to mail it?  Can you send it in via E-File?  Keep reading to find out your options.

Current Tax Year and Date Is BEFORE October 15th
If you missed the deadline but you are filing before October 15th, then you can still E-File your return.  The IRS shuts down the E-File system in October to get everything ready for the next filing season, so you only have until then to get your return transmitted.  Your options for doing this are to:

  1. Use IRS Free File or Fillable Forms. There are stipulations regarding these options which you can read more about here.
  2. Use Commercial Software.
  3. Find an Authorized E-File Provider. File Old Tax Returns is an authorized E-File Provider via Wilson Rogers & Company, Inc.  We can gladly help you in preparing, filing and transmitting your current year tax return.

Current OR Prior Tax Year and Date Is AFTER October 15th
Well, that means that you’ve missed the E-File window and your only option is to mail a paper copy of your return to the IRS.

The following are the steps you need to take to get your return prepared and ready for mailing:

  1. Gather your supporting documents. Look for your old tax documents, such as W-2s, 1099s, or 1098s. You will need these documents to file your return(s), as the IRS will expect you to report on your return what was reported to them via these forms.
  2. Request transcripts if necessary.  The most elusive documents for most clients are their wage and income forms.  The easiest way to obtain them is to contact your old company.  However, it’s never a sure bet that they’ll have the information on record, especially if it’s from several years ago.  Alternatively, you can always get copies directly from the IRS by requesting a “Wage and Income” transcript via the IRS Get Transcript Service.  If you can’t access the web service you can always use Form 4506-T, Request for Transcript of Tax Return
  3. Prepare your return(s). This is where the rubber meets the road.  The three steps that we outline under preparing your return before E-File shuts down apply here.  You can use the IRS fillable forms, find prior year software or hire a tax professional.  If you want to know how our process works, just download these instructions or give us a call at 844-TAXES88 (844-829-3788).
    • For filing back taxes, you should seriously consider hiring a tax professional. Since you are already late on filing, it would be in your best interest to file accurate returns the first time.  This way, you don’t have to worry about a bunch of back and forth with the IRS asking you to make corrections via dozens of letters to your house.
    • A tax professional can also help to ensure that all of the deductions and credits applicable to that year are applied to your return.  Remember, tax law changes each year and remember what was applicable in 2007 in 2015 might be a bit of a stretch.  But services such as ours always retain the applicable reference literature so that we can prepare an accurate return, not matter how many years late it is being filed.
  4. Mail In Your Return.  In this post we tell you the addresses where you can send your old tax return once you’ve finished preparing it. Note that you must send it to a different IRS Service Center depending on 1) if you are sending them money or not and 2) where you live.
  5. Address any balances owed.  This post from our sister site discusses how to deal with any outstanding balances.  Our basic recommendation is to 1) respond to any IRS or state correspondence, 2) assess what options are available to you and 3) enter into an appropriate resolution.  Once you’ve filed the returns and addressed the balances (if any) you are ready to move forward.  Just make sure that you remember to file your returns going forward or you’ll find yourself reading this post all over again!

Federal & State “Where’s My Refund” Pages

That was easy - for some!

That was easy – for some!

Many of our current year clients begin to get a little worried when their tax refund doesn’t come as quickly as they expect.  They often call us and ask us “Where’s my refund?”  To that question we usually reply that it can take anywhere between 7-21 days for one to receive their money.  If they have any concerns, they can continue to check the status of their refund’s processing via the IRS’ or states website.

Out in cyberspace, the various state tools are housed on each individual site.  This post aggregates them into one place for all to search.  So no matter if you filed in one, two or nine states, you now have a place where you can check them all via the links provided!

Locate your state below and click on its name to be taken to the applicable “Where’s My Refund” site.  If you need further assistance, the name of the appropriate taxing authority and their general phone number is listed.  We recommend that you have a copy of your return(s) handy when you visit the appropriate site as it will often want to verify things such as SSN, filing status, refund amount or Adjusted Gross Income (AGI).

Note that you will not find any links for the states of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.  Why?  These nine states don’t have an income tax!

IRS “Where’s My Refund?” Use this link to check on the status of your Federal income tax refund.  If you need to speak to someone, feel free to call 1-800-829-1040.

Alabama Alabama Department of Revenue: 1-800-322-4106

Arizona Arizona Department of Revenue: 1-602-255-2060

Arkansas :  1-501-682-1100

California State of California Franchise Tax Board:  1-800-852-5711

Colorado Colorado Department of Revenue:  1-303-238-7378

Connecticut State of Connecticut Department of Revenue Services: 1-860-297-5962.

Delaware Delaware Department of Finance – Division of Revenue: 1-302-577-8200.

District of Columbia District of Columbia Office of Tax and Revenue: 1-202-727-4829

Georgia  Georgia Department of Revenue: 1-877-423-6711 option #2.

Hawaii Hawaii Department of Taxation: 1-800-222-3229.

Idaho Idaho Tax Commission:  1-888-228-5770

Illinois Illinois Department of Revenue:  1-800-732-8866

Indiana Indiana Department of Revenue:  1-317-232-2240

Iowa Iowa Department of Revenue: 1-515-281-4966.

Kansas Kansas Department of Revenue: 1-785-368-8222

Kentucky Kentucky Department of Revenue:  1-502-564-1600

Louisiana Louisiana Department of Revenue: 1-855-307-3893

Maine Main Revenue Services: 1-207-626-8475

Maryland Comptroller of Maryland Revenue: 1-410-260-7701 or 1-800-218-8160.

Massachusetts Massachusetts Department of Revenue:  1-617-887-6367

Michigan Michigan Department of Treasury:  1-517-373-3200

Minnesota Minnesota Department of Revenue:   1-651-296-4444

Mississippi Mississippi Department of Revenue:  1-601-923-7801

Missouri Missouri Department of Revenue:   1-573-526-8299

Montana Montana Department of Revenue:  1-866-859-2254

Nebraska Nebraska Department of Revenue:  1-402-471-5729

New Jersey New Jersey Division of Taxation: 1-609-826-4400

New Mexico New Mexico Taxation and Revenue Department:  1-505-827-0827.

New York  New York State Department of Taxation and Finance: 1-518-457-5149  

North Carolina North Carolina Department of Revenue: 1-877-252-3052 

North Dakota North Dakota Office of State Tax Commissioner: 1-701-328-1242.

Ohio Ohio Department of Taxation:  1-800-282-1784

Oklahoma Oklahoma Tax Commission: 1-405-521-3160

Oregon Oregon Department of Revenue: 1-503-378-4988

Pennsylvania Pennsylvania Department of Revenue: 1-717-787-8201  

Rhode Island State of Rhode Island Division of Taxation:  1-401-574-8829, option #3.

South Carolina South Carolina Department of Revenue: 1-803-898-5300

Vermont  Vermont Department of Taxes:  1-866-828-2865.

Virginia Virginia Department of Taxation: 1-804-367-2486

West Virginia Arizona Department of Revenue: 1-800-982-8297

Wisconsin Wisconsin Department of Revenue: 1-866-947-7363.

 

2020-04-04T12:13:03-05:00May 13th, 2015|Categories: Tax Questions|Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

2014 IRS Collection Statistics

IRS Stats

The U.S. Internal Revenue Service is the single largest collections agency in the world. We always find it kind of cool to analyze the collections data that is released every year. It always provides some insight into what is going on in the “delinquent” or “unfiled” tax return world. Since filing old tax returns is what this site is all about, here are some interesting tidbits from the most recent statistics available:

Budget & Personnel
In 2014 the IRS spent $11.6 billion and employed just over 84,000 to collect more than $3.1 trillion in tax revenue. Of those 84,000 personnel, over 18,000 are directly involved in enforced collections against taxpayers that owe back taxes.  In 2013 the IRS spent $11.6 billion to collect $2.8 trillion in tax revenue, using just under 87,000 employees, of which 19,000 were involved in enforced collections.

Delinquent Tax Return Inventory
In 2014 the IRS began with 11.7 million delinquent accounts (unfiled returns).  7.6 million new cases were added to inventory while only 6.9 million were closed.  This put the ending inventory at 12.4 million returns.  In 2013 the IRS saw 7.7 million new cases added to inventory but they were able to close 7.5 million.

Examinations
In 2013 there were 145.2 million individual tax returns filed, of which 1.2 million were selected for review (audit) in 2014.  Thus the effective audit rate was 0.9%.  Of those returns examined, the IRS proposed changes in 87% of them with an associated $11.8 billion increase in taxes owed.  For the returns that were reviewed in 2013, the audit rate was 1%, the IRS proposed changes in 89% of what it reviewed with an associated tax increase of $14 billion.

Enforcement
In 2014 the IRS filed 535 million Federal tax liens against taxpayers.  This was a 11% decline when compared to 2013.  Likewise, 432,000 seizures were conducted, which was down 21% from the prior year.  However, 1.9 billion levy notices were filed against taxpayers which was a 7.6% increase over 2013.

Offers In Compromise
In 2014 the IRS received 68,000 offers where taxpayers attempted to settle their tax debt for less than what was owed.  Of that number, the IRS accepted 27,000, which was a 12.9% decline from what the agency accepted in 2013.

What Does This All Mean?
The summary version of the above is that:

  • IRS budget cuts are forcing the agency to collect more tax revenue (current and delinquent) with a reduced staff
  • While the number of “new” unfiled returns added to inventory is increasing, the IRS isn’t able to close the gap on the case load
  • The IRS is examining fewer returns and enforced collections are down
  • All those commercials touting that you can settle your taxes for “pennies on the dollar” apparently don’t want you to read the IRS Consumer Alert about such statements.  They also don’t want you to know that the IRS only accepts less than approximately 45% of the offers it receives

We always tell our clients that while the IRS may be slow, they eventually do catch up with you.  If you are facing a tax problem, please know that “hoping” it will go away is not the answer.  The last thing you want is for the IRS to reach into your bank account on grocery day and take everything you’ve got in the account because you didn’t respond to the dozens of letters they sent you.  Didn’t get the letter?  The IRS doesn’t care because from their viewpoint, just because you  didn’t get it, didn’t mean we didn’t send it!

We’re always here to help you out.  So if you’d like to discuss your situation or want to file any of those “delinquent” returns you’re sitting on, feel free to give us a call at the number listed in the upper right or shoot us an email to the address listed in the footer of this page.

Understanding Your IRS Notice

When you receive an IRS notice, the first reaction is to panic and want to toss the envelope into the trash can!  We recommend that you don’t do that but instead, take a deep breath and keep the following in mind:

  1. An IRS notice typically will be about your federal tax return or tax account. It will be about a specific issue, such as changes to your account. It may ask you for more information. It could also explain that you owe tax and that you need to pay the amount that is due.
  1. Each notice has specific instructions, so read it carefully. It will tell you what you need to do.
  1. If you agree with the notice, you usually don’t need to reply unless it gives you other instructions or you need to make a payment.
  1. If you do not agree with the notice, it’s important for you to respond. You should write a letter to explain why you disagree. Include any information and documents you want the IRS to consider. Mail your reply with the bottom tear-off portion of the notice OR respond via fax if a number is provided.
  1. Always keep copies of any notices you receive with your other tax records.

There are dozens of IRS notices that one can receive; for a comprehensive list check out this link on the IRS’ website.  Listed below is a brief summary of some of the more common notices and a description of what they mean.

CP10:  The IRS made a change(s) to your return because they believe there’s a miscalculation. This change affected the estimated tax payment you wanted applied to your taxes for next year.

CP11:  The IRS made changes to your return because they  believe there’s a miscalculation. You owe money on your taxes as a result of these changes.

CP14:  This IRS sent you this notice because you owe money on unpaid taxes.

CP54G:  Your tax return shows a different name and/or ID number from the information the IRS has for your account.

CP2000:  The income and/or payment information the IRS has on file doesn’t match the information you reported on your tax return.  This could affect your tax return; it may cause an increase or decrease in your tax, or may not change it at all.

CP2005:  The IRS accepted the information you sent them. They’re not going to change your tax return and have closed their review of it.

CP2501:  You need to contact the IRS as they have received information not reported on your tax return.

Form 668Y:  Notice of Federal Tax Lien.

CP501:  You have a balance due (money you owe the IRS) on one of your tax accounts.

CP503:  Reminder notice that the IRS has heard from you and you still have an unpaid balance on one of your tax accounts.  Typically sent 30 days after the filing of a tax lien.

CP504:  Notice of intent to level.  If you do not pay the amount due immediately, the IRS will seize (levy) your property and apply it to pay the amount you owe.  Typically sent 30 days after the above notice.

LT1058:  Final Notice prior to levy.  If no response is received within 30 days, the IRS can levy you.  This is also your opportunity to request a hearing with regards to the matter.

Filing Taxes Without A W-2 or 1099

W2 1099

So you finally get around to filing that tax return that was due eons ago.  You know, the one with the job that you worked at 5 years ago.  The one where you think you were paying on your student loan.  But wasn’t there also that job where you worked as a “consultant” and they just paid you money and didn’t take taxes out?  Oh yeah, and then that one company that closed up shop a week after you bailed!  But wait, where are all those documents showing how much you earned?

It’s not uncommon when you are dealing with an “old” tax return for you to have “misplaced” some of those wage documents (e.g. Form W-2 or Form 1099-MISC).  If you need to obtain them so that you can file your tax return, here are some recommendations.

Contact The Employer
The best place to start with trying to obtain your W-2 is with your employer.  The copy they issue you will be the same as the one they provided to the IRS.  Furthermore, it will have the state details (i.e. amount of state tax withheld).  This is important when compared to getting your W-2 via the next option.

Request A Copy From The IRS
Every tax form that you receive from someone is typically also filed with the IRS.  W-2s are no exception to the rule.  Thus, if you can’t get a copy from your employer, the next best option is to request them from the IRS.  To do this, you want to request what is known as a Wage and Income Transcript.  You can do so online and get instant access or you can request that they be faxed to you by calling 1-800-829-1040 and asking for the above transcript.  The main downfall of an IRS transcript is that it will NOT have the state income tax withheld.  Thus, if you are trying to file your Federal and State Income Tax Returns, you’ll probably want to go  the first route.

Use Your Last Paystub and Form 4852
Sometimes you are trying to file your return for the current year OR the W-2 isn’t available via transcript just yet. In these instances file Form 4852, Substitute for Form W-2 Wage and Tax Statement, in place of the W-2. Use your last paystub to estimate your income and withholding taxes as accurately as possible.  Just be aware that the IRS may delay processing your return while it verifies your information.

If you need help in obtaining your W-2s or a transcript, feel free to give us a call or shoot us an email.  Also feel free to check out this page to see the many other ways we can assist you.

How To Pay Taxes Owed

If you find yourself in the undesirable predicament of owing the IRS, here are some things for you to keep in mind so that the situation doesn’t go from bad to worse:

Payment Methods & Tips

  • You can pay taxes electronically 24/7 on www.IRS.gov. Just click on the “Payments” tab near the top left of the home page for details.
  • Check out IRS Direct Pay to pay directly from your bank account. It’s secure and free and you’ll get instant confirmation that you have submitted your payment.
  • Pay in a single step by using your tax software when you e-file. If you use a tax preparer, ask them if they can make your payment electronically.
  • Whether you e-file your tax return or file on paper, you can choose to pay with a credit or debit card. One service that our clients often use is www.1040paytax.com.
  • If you enroll in the Electronic Federal Tax Payment System (EFTPS) you can pay your federal taxes electronically and directly to the government. You have a choice to pay using the Internet, or by phone using the EFTPS Voice Response System.
  • If you can’t pay electronically, you can still pay by a personal or cashier’s check or money order. Just make you check payable to the “U.S. Treasury” and be sure to write your name, address and daytime phone number on the front of your payment. Also, write the tax year, form number you are filing and your Social Security number. Use the SSN shown first if it’s a joint return.
  • If you pay by paper check, complete Form 1040-V, Payment Voucher. Mail it to the address listed in the instructions based on where you live.

Balance Owed On Prior Year Taxes

  • If you filed your return late, just know that the amount owed reflected on the return is incorrect. This is due to interest and penalties. Thus, once you file your return, the IRS will send you a notice indicating the correct amount to satisfy your liability.
  • If you have moved since you last filed a return with the IRS, make sure that you submit Form 8822 so that you can receive all future communications. The last thing you want is for the IRS to think you are ignoring you and then begin aggressive collection actions (e.g. liens, levies, wage garnishments, etc).

Inability To Pay Balance Off With One Payment

  • If you can’t pay off the balance with a single payment, it’s in your best interest to send in as much as you can to minimize the penalties and interest that will be assessed.
  • The IRS has many options for you to pay your balance off, including payment plans. This post on our sister site talks about setting up a guaranteed installment agreement and is well worth the read. 

Need assistance with your tax balance? Give us a call at 844-TAXES88 (844-829-3788) and we’d be happy to discuss you situation and tell you how we can be of service.