4 Ways that Unfiled Tax Returns Can Haunt You
May 31, 2019
Haven’t filed taxes in a year or two (or four or ten)? You’re not alone. While the majority of people pay their taxes on time, about 7 million taxpayers fail to file their taxes every year. If you’re in that 5% of taxpayers, you might be asking yourself, “What’s the worst that can happen if I haven’t filed my taxes for this past year or previous years?” Well, the consequences for unfiled tax returns aren’t pretty.
We’re not saying that the IRS operates like a scary movie villain, but they do know how to haunt people who don’t follow their rules and file on time. Their tactics range from disappearing tax refunds and credits to a not-so-pleasant surprise filed tax return on your behalf. The kind of haunting that the IRS will do isn’t so easily solved with burning sage or sprinkling some salt. Instead, this IRS haunting might be best solved by tax preparation help.
1. You Could Face Suspenseful Silence from the IRS About Your Unfiled Tax Returns.
Believe it or not, if you don’t file your taxes, it’s possible the IRS may not reach out to you immediately.
You’ve probably heard horror stories about notices piling up in your mailbox and IRS tax collectors knocking down your door. But you rarely hear about the even spookier outcome: that you don’t file, and the IRS seemingly doesn’t do anything in response.
In case the IRS hasn’t contacted you, don’t be quick to assume that this suspenseful silence means they haven’t noticed. It’s possible, especially if you’re self-employed and don’t have any W-2s or Form 1099s that get sent to the IRS.
However, it’s equally possible that the IRS doesn’t have your correct address. They could be mailing you notices left and right. But if they don’t have an updated address for you, you won’t get those notices. And unfortunately, that’s on you. It’s your responsibility to update the IRS on your current address.
2. Tax Refunds and Credits Can Disappear Before Your Eyes.
Say you didn’t file your tax return four years ago. If you had any tax refund due to you from that return, it’s long gone by now. See, if you’re due a refund for withholding or estimated taxes, there’s a statute of limitations that kicks in. If you don’t file your return within 3 years of the due date, you’ll lose that money that was rightfully yours.
The same goes for tax credits like the Earned Income Credit. In fact, the IRS can be even more stingy with tax credits. If tax credits can cause a refund on a previously unfiled tax return, the IRS is unlikely to give them to you in retrospect.
Why let the IRS keep money that is rightfully yours? By leaving your tax returns unfiled, you’re giving them the go-ahead to hold onto your hard-earned money.
3. You Can Struggle to Make Big, Life-Changing Purchases.
Think about those monumental purchases you may make in your life:
- A brand-new car
- A mortgage on the perfect house for your family
- A loan to start your own business
- Tuition to attend the college of you or your child’s dreams
One of the unexpected ways an unfiled tax return can haunt you is your sudden inability to make these big buys.
When you make purchases this big, you’re typically borrowing money. When you borrow money, financial institutions tend to require income verification to ensure you’ll be able to repay them. If you aren’t a W-2 employee, how will banks verify your income? You guessed it: using your tax returns.
Not having tax returns could indicate to lenders that they cannot trust you’ll be able to repay the loan. This isn’t to say you’ll be unable to buy a home or a car; just keep in mind that these processes will be much more difficult without tax returns.
Also, you’ll need your federal income tax returns to complete the Free Application for Federal Student Aid (FAFSA). Without this info to prove your financial need, you’ll be unable to apply for federal financial aid. Whether it’s for you or your child, this means you’ll miss out on helpful federal grants and subsidized student loans. And for similar reasons to those posed above with loans for cars and houses, you may find it difficult to take out private student loans as well.
4. The IRS Can Surprise You with a Twist Ending by Filing for You.
If you don’t submit a complete tax return, the IRS may do themselves a favor by filing a substitute.
Notice that we don’t say they do you a favor by filing your unfiled return. That’s because the substitute return they file on your behalf will not give you any of the credits, deductions, or exemptions you may have qualified for.
When the IRS files for you, it’s because they believe you owe them a tax debt. With a tax bill in play, the IRS has more to gain by filing for you.
What This Twist Ending Looks Like
You’ll receive a Notice of Deficiency CP3219N, which will walk you through their substitute return. You’ll have 90 days to file the return in question or file a petition in Tax Court. If you don’t do anything in those 90 days, the IRS will go ahead with their return.
Once the IRS has hit you with that twist ending bill (plus any failure-to-file and failure-to-pay penalties they see fit to charge), you’ll then have to figure out how to pay your balances owed. Otherwise, you risk facing further IRS collection actions like levies and liens. Of course, you always have tax relief help options you can explore like an installment agreement or an IRS debt forgiveness program.
However, it’s still best for you to focus on filing your own tax return to try and take advantage of those deductions and exemptions the IRS may have glossed over in their substitute return. Once they have your filed return, the IRS usually will adjust your account accordingly.
Instead of ignoring unfiled taxes, take control of your life. When unfiled tax returns are haunting you, seek tax preparation experts to help to clear the air. With years of experience under their belt, tax professionals like ours can make sure your unfiled tax returns are filed correctly while maximizing deductions to minimize any potential tax bills.
Owe the IRS and Can’t Pay? Why You Need Tax Relief Help
May 9, 2019
By now, your taxes have hopefully been filed. You may have come out of 2018 without owing the IRS (or even getting a refund). However, there’s a big chance you instead found yourself with a tax bill you aren’t able to pay. If that’s the case, don’t be too hard on yourself. Many people found themselves in this position due to a withholding mistake (thanks, recent tax reform!) Getting bogged down in frustration and fear of an unmanageable tax bill won’t help now. Instead, read on to determine if tax relief help is your best bet to focus on a brighter tax future.
You don’t have the money to settle your bill and can’t see how you ever will.
You’re feeling hopeless. Maybe your current balance with the IRS is more money than you’ve ever seen in your bank account at any given time. Or perhaps you just mortgaged a house or leased a car, and you’re concerned about what this tax bill could mean for you. Whatever financial pickle you find yourself in, the fact remains: there’s no way you can just make one easy payment to clear up this tax debt.
Tax relief help experts like ours have been around the IRS block and have seen all sorts of financial situations. They’ll take the time to learn everything important about your unique circumstance. Then, they will be able to walk you through your options to find a route out of tax debt that works for you.
You don’t know how to deal with the IRS.
Imagine the headache you’d have if you went to make that dreaded IRS call. You immediately face droning hold music. With every staticky chord, your anticipation gets worse and worse. Even if you get a pleasant IRS rep, you’re still ultimately getting ready to have a conversation with someone whose main goal is to get what you owe the government.
Okay, we’re sorry we asked you to imagine that. Instead, just imagine the headache you wouldn’t have if you had a professional working with the IRS on your behalf.
Experience is key when it comes to IRS dealings and we’ve got plenty of it. Our team has a collective 250 years of experience in tax relief help. We know what questions the IRS will ask before they ask them. And we can help minimize long delays caused by submitting unnecessary information or payment requests that we know they won’t accept. Working with the IRS is our specialty, so it doesn’t have to be yours!
You want to keep the tax relief damage to a minimum.
The worst part about tax debt isn’t the notices that the IRS will send you nonstop or even the anger you might feel for being in this situation. There are far more serious consequences ahead. From levies against your property or wages to penalties and interest that bury you in even more debt, the IRS can be unrelenting when it comes to trying to recoup what they’re due. And trust us, they can take things up a notch if they feel like you’re not paying attention.
The good news is that the sooner you tackle your tax debt, the better. By seeking tax relief help, you’ll ensure that there is a tax pro with experience and passion dedicated to working with the IRS to get you the best possible outcome.
If any of the above applies to you, tax relief help may be right for you – but be wary.
Tax relief help can really change your life. However, you’ll want to be careful. There are tax relief companies out there that will scam you out of your money and leave you in a worse situation.
Make sure any tax debt relief company you decide to work with is transparent. They should be open about their pricing and what you can expect from them. Most honest tax debt relief companies will offer a free consultation to gain a better understanding of your current situation before discussing what relief options are available to you. They won’t promise you solutions like tax debt forgiveness without knowing the full picture. Feel free to ask about their experience and expertise to ensure you’re getting seasoned professionals on your side.
We’ve helped resolve over $18 billion in tax debt in the decade we’ve been in business. Our tax experts have a wide range of professional accreditations and are always ready to provide you with top-rated tax relief help. Contact us for your free initial consultation to take that first step towards freedom from tax debt.
Five Signs That You Need Back Taxes Help Now
March 25, 2019
Back taxes are a slippery slope. They can come about when you don’t pay enough on your taxes, when you fail to report all your income, or when you don’t file a tax return at all. No matter how unintentional, that first step down that back taxes path can seriously cost you. And it can be frightening to try and figure out how deep you’ve gotten once you’ve fallen. So how do you know when you need to reach out for back taxes help? What red flags indicate that you’ve hit the point where expert help in filing your back taxes is your best option?
If any of the following signs ring true for you, you may need professional back taxes help.
1. IRS notices have piled up in your mailbox.
If you have a stack of notices from the IRS about your back taxes, chances are it is time to do something about it. Instead of throwing the next CP14 notice on top of the rest (or worse, tossing it in the trash), reach out for help to put a stop to the endless stream of IRS letters.
2. The IRS has sent debt collectors after you.
While the IRS will stick to sending you notices in the mail, they can assign your case to a private debt collection agency. They will let you know if they do this. However, once it’s done, collectors will bombard you with phone calls and messages about your outstanding debt with the IRS. And as we all know, collections agents can be relentless.
3. Your passport is in jeopardy.
Believe it or not, delinquent tax debt can cause the IRS to deny, limit, or even revoke your passport. Say sayonara to all your travel plans until you’ve worked out a solution to your back tax issue. Once you’ve paid back your debt or made plans to pay back your debt, the IRS can reinstate your passport but it may not be overnight.
4. You lose your refund, your property, or part of your paycheck.
Refusing to pay your back taxes can result in a tax levy, which means that the government could take your property to satisfy your outstanding debt. They can also take your tax refund and even levy your wages in an attempt to regain what is due to them. While the IRS will send you notices in the mail beforehand, a levy can still shake you to your core. That’s why it might be best to consult a professional to help you fix your back tax issue. Keep your property where it belongs – in your hands.
5. The sum of what you owe (plus any penalties) is much higher than you can afford.
If you’ve got back taxes but you can afford your total balance, your best bet is to bite the bullet and make that tax payment. However, this isn’t often the case. Sometimes your overall balance due to the IRS (including any pesky penalties) is much more than you have available in your bank account. In that case, it’s in your best interest to seek out a tax pro who can help you resolve your back tax issue with a solution like debt forgiveness or a payment plan.
If you recognize any of these signs in your life, it may be time to reach out for back tax help. The longer you wait, the worse it can get. Give our tax experts a call today to take the first step towards freedom from back taxes.
What Is Wage Garnishment? (Spoiler Alert: It’s Not Parsley)
March 21, 2019
Garnishment. The first thing that comes to mind when you hear that word might be a decorative sprig of parsley next to a fancy plate of porkchop. Or you may imagine a crisp stick of celery in a tasty Bloody Mary. Those types of garnishes are delightful and enhance your meal or drink. So, what is wage garnishment? Is it like adding some cilantro to your paycheck? Unfortunately, the truth is far less pleasant.
What wage garnishment is
Wage garnishment is when your earnings are legally withheld by your employer to pay an outstanding debt. A typical example of wage garnishment would be the IRS levying your wages in an attempt to repay your outstanding tax debt balance with them.
There are different reasons for wage garnishment outside tax debt. These include garnishment for student loan debt, child support, and consumer debt.
Wage garnishment isn’t a rare occurrence. In ADP RI’s 2016 study, one in 14 workers was found to be carrying a wage garnishment.
How wage garnishment starts
Wage garnishment starts when a creditor requires your employer to withhold a certain amount of money from your paycheck. Your employer then pays those withheld wages to the person or entity with whom you have a debt.
Some garnishments begin with a court order. But with federal student loans, back taxes, or child support, no court order is needed to begin garnishing your wages.
You should receive notice before the garnishment begins. For instance, the IRS will send you letters notifying you of their impending actions. These notices will often give you time to resolve the issue before the garnishment begins.
While garnishment is usually started once you’ve had an outstanding debt and received notice, there was a recent proposal in the Senate to legalize mandatory wage garnishment for anyone with student loan debt. If that proposal passes, employers would automatically deduct payments from the paychecks of employees who have federal student loans.
The rights you have in the face of wage garnishment
While wage garnishment can leave you feeling helpless, you still have some important rights:
- You must receive legal notification about the garnishment.
- There is a limit to how much of your wages can be garnished in a week. This can vary depending on who is garnishing your wages, where you live, how many children you have, and whether you’re head of household. If your wages are being garnished by the IRS, they offer a helpful table for figuring out the amount exempt from their wage levies.
- You cannot be fired from employment because your wages are being garnished for any one debt. However, there is not necessarily protection from employment termination if your wages are being garnished for more than one debt.
- You can dispute your garnishment if you believe you don’t owe the debt. This may require a lengthy appeals process, especially if your wages are being garnished for tax debt.
How to stop garnishment – and get your life back on track
Now that you know what wage garnishment is and how it starts, you’re one step closer to putting a stop to it.
Wage garnishment typically does not stop until you pay the entire debt balance in full. For IRS back tax issues, this balance can include any interest, penalties, and collection fees accrued over the course of your debt.
If you do not have enough money to pay the debt in full, you can always talk to a professional about the other resolution options that exist for you. With IRS wage garnishment, a tax expert can help you figure out a solution like a payment plan that works for both you and the IRS. This sort of resolution will result in the IRS releasing your paycheck garnishment. No wage garnishment means you getting back to living your life more comfortably.