Prior Years Returns not Filed

Filing income tax return is the responsibility of all citizens by the due date – April 15 each year. However, millions of people do not file on time for a variety of reasons or excuses. Some reasons may be valid and may have no dire consequences, yet there may be other reasons that may have serious consequences – late filing penalty, late payment penalty, interest accrual on unpaid tax liability, tax burden for accumulated tax liabilities, payroll garnishment, tax levy and lien on properties, etc. etc. These are some of the adverse consequences and yet there may be more shocking events, per example, IRS and State taxing agency may take out the money from your bank account without any prior notice. The worst scenario could actually result in legal action that may also result into jail imprisonment.

Common reasons and misconceptions for not filing and the expected consequences that could easily be avoided:

Income is less than Minimum Filing Requirement: If you fall in this category of taxpayers, you may not hear from IRS or your State taxing agency. However, when you chose not file tax return, you may lose to receive refund for your tax withholding from your W-2, 1099-R, 1099-SSA, 1099-G and certain refundable credits – Earned Income Credit, American Opportunity Credit for education expenses, Childcare Expense Credit (mostly from State), etc. Your tax refund could be forfeited if you do not file the tax return within 3 years from the due date of filing the return.

Have Business Loss and No Income: If you are a sole proprietor or self employed, you are required to file tax if your net income from business or self employment is 400 or more. Self-employment income is subject to Self Employment Tax as well as income tax for the taxable portion of income. Also you may qualify for EIC depending on your filing status and you have dependents or no dependents.

Net Operating Loss or Capital Loss: If you think you have Net Operating Loss (NOL) from business or self-employment or capital loss from the sale of stock or investment property, you are still required to file tax in order to report the income and expenses (or the basis in case of sale of stock or investment property). When you opt not to file simply because you have NOL or Capital Loss, IRS may assess taxes based on the income information it may have received from other sources and send notices for payment. Secondly, by choosing not to file, your NOL or Capital Loss is not recorded in IRS which could be used to reduce your future income.

File your Return before it is TOO LATE: If you did not file your income tax returns for prior years, Multiplex is place to help where the experienced Enrolled Agent prepare your tax returns and in most cases get big tax refund. If you have misplaced your tax documents (W-2, 1099 etc), no worries. Multiplex can get you copies of all your tax documents.

Back Taxes and Installment Agreement: If you owe taxes for prior years, Multiplex can make arrangements with IRS to consolidate your total tax liability and make installment agreement on easy payments.