Need to File Prior Tax Returns – What Can I Expect If I Need to File Prior Tax Returns?

Posted on 30. Jun, 2012 by in Prior Tax Returns, Prior Year Tax Returns

If you need to file prior tax returns, you may not know what to expect once you get them done.  It can be frightening to know that the law has been broken, and a sizeable amount of money is owed.  It may not be as bad as you think however, as basically the IRS just wants their money.  If you get the prior taxes filed, they will work with you on getting the debt paid in a way that your budget can handle.   The important thing is to get any prior tax returns filed as quickly as possible so that you can stop incurring penalties and fees and get on a payment plan.

The payment options vary based on the specific circumstances.  If you have certain hardships that have caused you to neglect the need to file prior tax returns, there are possibilities such as an abatement or an Offer in Compromise.  Do not file in anticipation of getting either of these options approved, as they can be difficult, but for very specific situations noted in guidelines set by the IRS, they can happen.  In abatement, the penalties and interest associated with late payment are waived.  An Offer in Compromise is a situation where the IRS accepts less than what is owed as full payment of the debt.

For most, an installment payment plan is going to be the only option.  There are two different types available. The most common is a standard plan comprised of equal monthly installments over a period of 3 to 5 years.  However, for budgets that may not be able to handle the amount of an equal installment each month, there is a step-up plan option.  In this plan, the installments start out lower and increase over time, presumably as income increases.

While no one looks forward to paying taxes, the need to file prior tax returns is as much a legal one as a financial one.  There are options, and though you can expect that the amount owed will be more than it would have been had the prior year taxes been filed on time, you will most likely not have to pay the whole amount at once.  So if you need to file prior tax returns then make sure you get them done ASAP.

We are a CPA firm and we help clients who need to file prior tax returns.  Call us now for a FREE consultation at 1-888-570-1033.

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