Doing past taxes

I'm not possitive sbout this but I think you have to send a paper file for past taxes, you might check the IRS site. Keep checking back, someone may have some information regarding this.

I have no problem sending in a paper one but I am trying to help someone who doesn't have any money file 7 years of taxes he never filed.

I don't know the tax laws and at least with the online services they do a lot of the computing for me. He is self employed and there is a lot to these taxes. I have a good understanding of things but still need help.

If he's self employed, and he hasn't done taxes for 7 years it's best that he get an accountant.

I did the same thing and I had to use a CPA to fish through everything, it was a major thing and it was only for 2 years. I couldn't imagine trying to do it myself for 7 years worth of back taxes! It cost me $70 per year, money WELL spent in my opinion, and I am a total cheap-o!

Well you can't get blood out of a turnip and he doesn't have anything of value. I mean nothing. He is making approx $1000.00 a month, has a house that is going to be foreclosed on, hasn't made a payment since last May. The IRS put a lien on that in November we found out yesterday. That house is worth less than what is owed on it. He has a new motorcycle of a couple years old that he is way upside down on the loan on.

So honestly what are they going to get. He has no records except for the last year or two. I don't even know if they are going to let him take the 30% he used to pay a helper since he paid him cash. He paid everything in cash with no reciepts. How in the world do you recreate that?

he's got a problem for sure, has he called the IRS and asked them what to do?

He was just in there yesterday and her answer was that if you can't afford to hire someone you will have to file them yourself. She just wants them filed before she can proceed with what she has to do.

I think I have read they have 10 years to collect. I have also told him I think they will be watching what is going on with assets etc. for as long as they are within their time frame to collect.

So I don't know if that means down the road in a few years when that harley becomes worth something, at that point they would try to take it or not.

A self-employed person who has to file past tax returns....

1. Must file paper returns. there are no on line preparation services for past years because all on line preparation used e-file which is for the current filing year only.

2. Should retain a qualified CPA or EA. The cost of this will be a LOT less than the attorney he will probably have to retain to get him out of the hole he is digging himself into. The longer you go without filing the closer you are getting to Criminal noncompliance.

3. The 10 year Statute of Limitations on collection doesn't even start until a return is filed, nor does the 3 year SOL on audits.

4. If he was required to file and didn't, chances are the IRS did a Service Filed Return (SFR) after 3 years and already has an assessment based on the SFR.

5. He better start coming up with some money - because he will probably owe the IRS a bundle. It is possible the IRS will accept an Offer in Compromise or even put his account in Currently Not Collectable, or enter into an installment agreement but these things are best negotiated by a CPA or an EA who specializes in Tax Problems. The American Society of Tax Problem Solvers (www.astps.org) can point you to someone to help in this area. From your post where you detail his house problems, I tend to believe an Offer in Compromise would work (and yes, I am an EA and an ASTPS member and I specialize in IRS Tax and Problem matters). No one will do this work for free.

6. Don't worry about the audit issues. As a matter of strategy (and I have represented taxpayers who had to file as many as 12 years at a time) if I know an Offer in Compromise is being proposed I tell the client that we will file a tax return claiming next to no expenses - only what you can actually prove. Reason: IRS is much more concerned with the filing than with the Examination, and by claiming no expenses there is nothing to audit. Meanwhile, the Offer is actually easier to get. IRS will forgive $1 million in taxes a lot faster than they will forgive $100.

You and your BF may wish to visit my web site: www.stop-irs.com