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What to Do If You Haven’t Filed Taxes in Years?

By Todd Whalen - March 12, 2020

What to Do if You Haven’t Filed Taxes in Years?

Why Is It Important to File an Annual Tax Return?

Do you have unfiled tax returns? Many people receive a tax refund but end up owing the Internal Revenue Service for unpaid taxes because of not filing a tax return. If this is you, don’t wait to file your return or you could risk being charged with a crime.  The IRS does not forget about or overlook unfiled taxes and they will eventually catch up to you. If it’s been one year or several years since you filed a tax return, or if you’ve never filed, you need a tax return professional with the training, experience, and skills to handle your tax filing situation.

We only have three years to file a tax return and claim any refund that is due to us, but the Internal Revenue Service has 10 years to request an unfiled tax return. If you owe the government unpaid taxes, the IRS will assess a 5% penalty to your unpaid tax liability each month that it is not paid after the filing deadline and after 5 months (25%) the penalties continue at ½ of a percent. Any penalties that are being assessed for unfiled tax returns could be causing your tax debt to continue to grow larger every day.

What Can the IRS Do to Collect Back Taxes?
In many cases, the IRS can file a Substitute for Return (SFR) if you have not filed a tax return on your own for several years. They usually use the worst filing status possible for unfiled tax returns and do not allow exemptions for dependents, or apply for any available child credits. They can use an estimate of your gross business income, disallow any business expenses, and send you a huge bill that eventually becomes a legal debt. This can easily lead to enforcement of collection actions such as levies and liens that you are not prepared for or expecting.

When this action is taken the SFR does not take into account any deductions you may have been entitled to, so your best option would be to go back and protest these old returns that the IRS has filed so that your tax bill is accurate and you can take advantage of any deductions for which you qualify. The IRS takes filing annual tax returns very seriously, and usually, the penalty for failure to file is even higher than the penalty for failure to pay back taxes.

Are There Any Tax Payment Options Should You Consider?
Although the thought of being charged with a crime and having the IRS attach your wages and/ or drain your bank account is scary, there are ways to handle this scenario. When someone needs help with unfiled tax returns, many times there are large balances due.  In cases like these, an Offer in Compromise can be the ideal resolution for many people. An Offer in Compromise means that the IRS will accept less money than is owed to settle the entire tax burden. There are specific rules you must follow to qualify for this solution. You are required to provide very detailed financial and personal information which is used to determine your ability to pay now and what they believe you can pay with an installment plan. There are many variables that factor into what the IRS will accept.

The Denver based tax professionals at Advanced Tax Solutions are here to help you work out this situation in your best interests. We understand the processes involved, how the IRS operates, and how they value income and assets. We offer professional Offer in Compromise tax services in Denver to help assure you get the best possible outcome.

Get the Help You Need Today
We understand that finding a solution to your tax problems caused by not filing a tax return can be an intricate process. Don’t try to negotiate your tax issues alone! Advanced Tax Solutions has years of experience in the area of helping people with unfiled tax returns. We will walk you through the process of filing old returns when you need someone you can trust. If you’re facing the daunting prospect of filing old tax returns, reach out to our team of tax professionals today.

Call us at our Denver office at (303) 753-6040 to schedule a free consultation for the help you need. Our goal is to help you put your tax problems far behind you. We keep our prices reasonable, so you can have one less financial burden to think about. Contact us today, and let’s get started.


Filing Unfiled Tax Returns

By Todd Whalen - September 17, 2019

The following video contains important information about filing unfiled tax returns that you will want to consider BEFORE trying to get back into the tax system. In the video, Todd Whalen, the founder of Advanced Tax Solutions, CPA, PC, addresses everything from what the IRS wants you to file (not necessarily all the old years), if you can get in trouble or go to jail for not filing, considerations about the tax protester movement, and more. If you owe back tax returns to the IRS this information may save you a lot of headaches, ease your fears, and may even save you some money. If you are ready to file unfiled tax returns, our 20-year veteran shares all the information you need to get started. Knowledge is power when dealing with the IRS.

Questions about filing unfiled tax returns? Contact the experienced tax resolution professionals at Advanced Tax Solutions.

Understanding IRS Wage Garnishment

By Todd Whalen - August 22, 2019

What is Wage Garnishment?

A wage garnishment is a type of levy where every time you get paid, your employer is required by law to send a portion of your wages to a creditor or person to whom you owe money. Common reasons for wage garnishment include unpaid child support, consumer debts, student loans, and tax levies. If you have failed to pay your taxes, you could be at risk for IRS wage garnishment. If this happens, the IRS will not take all of your pay, but anything over and above a small exemption amount determined by how often you are paid, your filing status, and your personal tax exemptions will be turned over to the IRS to pay down your debt. Your wages are garnished until the debt is paid in full. If you cannot pay your tax debt, establishing a payment plan with the IRS for repayment of your tax debt is one way to stop IRS wage garnishment and can leave you with more of your paycheck to pay bills and maintain a normal lifestyle.

IRS Garnishment Rules

Before an IRS levy or garnishment can be made:
  • You will receive a Demand for Payment of the amount due.
  • If you fail to pay this invoice, you will receive a letter (known as Form 1058) entitled “Final Notice of Intent to Levy and Your Rights to a Hearing.”
  • You will have 30 days to file an appeal.
  • If you do not file an appeal within this time frame, the IRS must wait an additional 15 days to ensure the appeal isn’t in the mail.
  • Once this time has passed, the IRS can seize your assets, bank accounts, and wages without further notice.
A garnishment can do significant damage to your credit report and will impact your income, so it’s always a best to avoid IRS wage garnishment if possible. If you receive a Demand for Payment, it is important to quickly take steps to fix your tax problems.

How to Stop IRS Wage Garnishment

Establishing a payment plan for repayment of your tax debt is one way to stop an IRS wage garnishment. Appealing the decision is another way to avoid garnishment, but there’s no guarantee your appeal will work. If you are already experiencing a wage garnishment, you still have some options, including:
  • Borrowing money to pay your tax debt. There is a process called a lien subordination, where IRS has the ability to remove a lien long enough for you to borrow money if it is in their best interest.
  • Having the debt placed as uncollectable under the IRS’s Fresh Start program. Depending on the amount of tax debt you owe, you may be able to get a lien released.
  • Submitting an Offer in Compromise. An OIC permanently settles the debt for less than you owe. It is best to have a tax professional handle this process for you.

Advanced Tax Solutions has extensive experience negotiating deals with the Internal Revenue Service. We will be able to determine the best method of dealing with the IRS for repayment of your tax debt. We are adept at getting the best deal for our clients and giving them peace of mind by knowing their tax debt situation is being handled by professionals. If you are facing IRS wage garnishment, get in touch with our experienced team of Denver tax professionals today for help. Dealing with the IRS can be stressful and complicated, which is why Advanced Tax Solutions offers IRS garnishment help to ease your burdens. Call our office in Denver any time at (303) 753-6040, and let us help you find the solution. Our goal is to help you put your tax problems far behind you as quickly as possible. Contact us today, and let’s get started.
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What Payroll Taxes Do Employers Pay?

By Todd Whalen - July 12, 2019

What is a Payroll Tax?

Payroll taxes are levied as a percentage of what employers pay their employees (or as a total percentage of a self-employed person's income). In the United States, payroll taxes are split evenly between employers and employees, with employers paying their percentages and employees seeing their percentages deducted from their paychecks. These taxes include both Medicare and Social Security, which fund programs to supply health coverage and monthly income in retirement. Because the employer payroll taxes are charged directly to the business, it is wise to budget for your hiring salaries and wages based on more than just the gross income of your employee. Rather, you'll need at least 7.65% more based on federal payroll taxes alone.

What Payroll Taxes do Employers Pay?

Employers are responsible for federal, state, and local payroll taxes, as applicable in the area where they are located. Federal employer payroll tax rates currently stand at 6.2% for Social Security and 1.45% for the employer for Medicare. For each of these categories, your employee pays the same percentage, to bring the total payroll taxes to 12.4% and 2.9%, respectively. There are also federal and state unemployment taxes paid by the employer. To read more about what payroll taxes employers pay, visit the IRS website.

How Much is Colorado Payroll Tax?

Colorado has its own employer payroll taxes as well, which are based on the wages of your employees and can change every few years. To keep track of your current obligations for Colorado payroll taxes, visit Colorado's tax website or contact Advanced Tax Solutions with your questions.




Advanced Tax Solutions Payroll Tax Help

Advanced Tax Solutions understands that payroll tax liabilities can be a bit confusing and require the assistance of a professional who can help you file quickly and accurately. The difficulty of payroll tax processing can lead to expensive IRS payroll tax penalties. Many time. there are ways to have the IRS abate some of these penalties. If you have unwanted IRS payroll tax debts or payroll tax penalties our experts can assist you.

If you need payroll tax help, reach out today to Advanced Tax Solutions! Our experienced Colorado payroll tax specialists can help you understand your payroll tax liabilities as an employer.

What is a tax lien?

By Todd Whalen - January 18, 2019

What are Tax Liens? Good question!  A tax lien is very similar to the lien a bank places on your house as security for your mortgage debt.  One big difference however, is that once the IRS has filed a Notice Of Tax Lien it attaches to EVERY asset you own, not just a house.  Some items, such as a house, cannot be sold until the lien is paid in full.  What if the bank already has a lien and then the IRS files a lien?  The way it works is that liens are honored in order of filing dates.  So if you have a house and the bank has a lien on the mortgage, then should the house be sold, the bank would be paid first.  Next, the IRS lien would have to be satisfied.  Technically, the IRS would have to be paid in full before they would release the lien and let the house transfer to the buyer after that.  If there was any additional money after the tax lien and bank lien were paid, then you would get that.
What if you don’t have enough equity in the house after the bank is paid off to pay the IRS in full?  Great question.  The IRS has a formal process called a lien subordination.  The IRS is willing to release the lien as long as they get all the equity that is left after the bank lien is paid in full.  In other words, you would not receive any money, and the IRS would get everything that was available after the bank loan(s) were paid.  You don’t receive anything, but at least the IRS would agree to let the house transfer to the new owner without the lien being attached.  It is very similar to a “short sale” at a bank.  They don’t get paid in full, but at least you can still sell the house.  Please note, however, that you STILL OWE the unpaid balance, and the liens still exist for all other assets.
Will the IRS take my house if they file a lien?  The answer is kind of “no”.  Congress set up rules that make it hard for the IRS to enforce a lien and close it against your house to take it.  In other words, it’s much harder for the IRS to take your house.  That’s the good news.  The BAD news is that the IRS knows how to get around that. If you try to sell your house they get paid.  Even worse, if the bank forecloses on the house, the IRS gets paid with any equity in excess of the bank lien.  So, the IRS can garnish your wages (take your paycheck) and if you can’t pay your mortgage, they are in line with their hand out at the banks foreclosure waiting for the equity.  I’ve seen this many times and it’s a real problem if you are trying to keep your house!  In cases like this, it’s very important to set up a payment plan or other solution BEFORE the wage levy hits. It’s also possible to get a wage levy released so you can get paid, but it’s more expensive in professional fees, and is a time consuming and personally invasive process.  ALWAYS try to get a payment plan set up before a levy, but it’s especially true if you have a house!
Can an IRS lien be removed?  This is a tough question!  It is extremely tough for a lien to be removed once publically filed.  The reason is that the IRS does not even see this as a collection action.  Once you file a tax return, there is a lien that automatically exists due to the return being filed and it shows a balance due.  A lien exists automatically because there is a tax balance due.  It’s called a statutory lien, and NOBODY else has the power to do that!  Only the government can.  You can see who writes the rules!  If you read the letter that you receive from the IRS you will notice it’s not called a tax lien.  It is a NOTICE of tax lien.  It is simply the IRS telling the world via the public credit processes that a lien exists.  That’s why it’s hard to get them to release it.  The lien exists no matter what, and what you are really asking them to do is keep it quiet and remove the notice to the world that the lien is there.  They rarely will release it unless it’s in the government’s best interest.  For example, if you were a banker making $400,000 per year and you can prove you’d lose this very high paying job if the lien shows up in the public records and you are not qualified for any other type of high paying job, then the IRS may consider releasing the lien so you can pay them more due to your high paying salary.   It’s in their best interest to remove the NOTICE of lien (but not the lien itself).
The GOOD news about liens is that recently the IRS has adopted a streamline process that allows for easier lien removal if your balance is $25,000 or less, and you are in a direct debit payment plan for at least 3 months.  This may make it easier for some people, but it still takes a while before you can even apply.
Tax liens, whether they be federal, state, county or other can make life simply deplorable. The IRS can and will establish a lien against all of your assets, be it real estate or other when your taxes are not paid. The IRS can legally collect taxes from the sale of your assets which includes anything and everything that you may own.

A lien can be against you, a spouse, or your company. So anything you own, your spouse owns, or accounts receivable from your company can, in the blink of an eye, be property of the United States Government. This is one of the worst feelings anyone can have.

A tax lien will show up on your credit report and prevent you from obtaining funds from assets or from opening a checking account. Banks just will not want to deal with this kind of issue. If you were trying to get a loan for a purchase, the interest will be ridiculous and not worth even entertaining. The list of how a tax lien can affect you is long.

Tax liens are a bummer to say the least