Houston Tax Attorney

Attorney Returns – Joe Mastriano, CPA Explains Why They May Not Be Your Best Choice!

Tax Attorneys may be a valuable resource for the preparation of delinquent returns. Delinquent tax returns should be filed immediately, even if you cannot afford to pay the taxes owed. While filing delinquent returns without paying will cause interest and penalties to begin accruing, failure to file on-time dramatically increases these penalties. (A return is delinquent if you have not filed it by the due date and did not receive an approval for a filing extension.) These combined penalties can be as high as 25 percent of the taxes owed!
3 Key Points about Delinquent Returns

Tax returns that are not in the IRS’s database of filed returns MUST be filed.

If returns are not filed ASAP then you may find yourself defending an audit in which the IRS has prepared an SFR (Substitute for Return). They will decide what they think you owe on each unfiled return.

The IRS should be contacted first to prevent the SFR from being filed and to also prevent any imminent collection action.

The IRS has filed/will file a SFR

It’s possible that the IRS has already filed returns for you. Under section 6020(b) of the Internal Revenue Code, the IRS may file a Substitute for Return (SFR) when you don’t file a return on your own. An SFR is usually not a good thing since it is calculated at Single or Married Filing Separate rates even though you may be qualified to file Married Joint or Head of Household. However, since the IRS has no return, they choose the highest tax rate, not the one you would choose for yourself.