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Old 02-04-2013, 07:59 PM
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Mom hasn't filed in years

Well as the title says my Mom hasn't filed her taxes in many many years. I don't know for sure how many but I would say around 20 years of taxes, give or take.

So now I am trying to help get her back on track and all set up, but I dont make very much money and not sure what to start with. I'll give the basic info for her situation so you know kinda where she is at right now.

She is self employeed and has been the whole time. I think she has filed a year here and a year there but everything in between is large gaps. As it stands now she has received a letter from the state basically saying people in your area with the license you have have made and average of $XX. If you agree sign here and pay the tax on it. I'm sure once she signs, she will get a letter from the IRS saying the same.

My grandfather has passed away also and she is going to be getting some money and I know she is worried that it will all get taken. So just trying to get the ball rolling before the situation gets uglier.

She has a lot of her papers for her write offs for the past say 5 years or so. I would just appreciate and info anyone could give me. Do I start by going to a CPA or go to a tax lawyer?

Thanks for any info, much appreciated!


Last edited by Travis : 02-04-2013 at 07:59 PM. Reason: typo


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Old 02-04-2013, 08:59 PM
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“She has a lot of her papers for her write offs for the past say 5 years or so. I would just appreciate and info anyone could give me. Do I start by going to a CPA or go to a tax lawyer?”====>As a self empoyer, assume that she is a sole proprietor, needs to file her return as long as the amount on Sch C of 1040 line 29/31is $400 or exceeds $400 or as long as the amount on Sch SE line 2 /3 is also $400 or exceeds $400 she must pay self employment tax to the IRS. Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. The 2010 Tax Relief Act reduced the self-employment tax by 2% for self-employment income earned in calendar year 2011. The self-employment tax rate for self-employment income earned in calendar year 2011 is 13.3% (10.4% for Social Security and 2.9% for Medicare). The Temporary Payroll Tax Cut Continuation Act of 2011 extended the self-employment tax reduction of 2% for calendar year 2012 so the rates for 2011 remain in effect for 2012. For self-employment income earned in 2010, the self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).ALSO, as she is filing as a sole proprietor, and/or a self-employed individual, she generally has to make estimated tax payments ifshe expects to owe tax of $1,000 or more when she files her return. If she did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, she may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. However, if her income is received unevenly during the year, she may be able to avoid or lower the penalty by annualizing your income and making unequal payments.She is liable At least six years, and possibly forever. While the government has only six years from the date the nonfiled return was due to criminally charge her with failing to file a tax return, there is no time limit for collecting taxes and assessing financial penalties for not filing. It is not until he sactually does file a return that the audit time limit -- three years -- and collection time limit -- ten years -- starts to run.As a practical matter, however, if she havsn't heard from the IRS in six yearsshe doesn't need to worry too much about taxes owed on a nonfiled return. The IRS usually doesn't go after nonfilers after six years -- unless the IRS begins its investigation before the six years elapsed and she owes a large amount of taxes. After six years, the IRS frequently purges its computer files.Some tax aattorney states,” It can be a good idea to file old returns, at least from the past six years. If you voluntarily file your old tax returns before the IRS notifies you that you are under criminal investigation, the IRS will usually not prosecute you criminally for your original failure to file those tax returns.”
Before you retain an attorney, consider this. You may be able to get all the help you need, for little or nominal cost, right from the IRS. The IRS can verify which years she failed to file, and help her track down those missing W-2 forms. More importantly, it may even cut her slack for waiting so long to file for her refunds. Generally, she only has three years to claim a tax refund. The clock runs for three years from the original date the tax return was due. For example, if her 2004 tax return was due on April 15, 2005, thenshe has until April 15, 2008, to file her 2004 tax return and still get her tax refund. But there are special rules if she is "financially disabled" - unable to manage her financial affairs because of a life-threatening or lengthy physical or mental illness.
You can call the IRS Tax Help Line at (800) 829-1040 or visit your local IRS office for more info.



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Old 02-04-2013, 09:02 PM
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also she may visit the IRS webpage here;Free Tax Return Preparation for You by Volunteers

for your state return,she can contact her state dept of rev fro more info



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