If you are someone who hasn't filed tax returns in a while, there are multiple motivations to getting into tax compliance: avoiding IRS scrutiny likely being top of the list. Perhaps, the experience of a recent client of WATAX will help stir you into action?
Our customer who had very valid reasons for falling behind on taxes including the death of a close family member was prompted into action on his IRS issue when the IRS levied his bank account for one million dollars. The million dollars comprised his life savings and complete operating capital for his business.
- How did he owe taxes without filing tax returns? The IRS filed his 2018 tax return for him charging him $1.3 million dollars without deductions. We call this type of return a Substitute for Return or "SFR."
- How did WATAX's representation of our client manage this levy issue? We contacted the IRS agent, whom we had previous experience with, and asked her to release a portion of the bank levy ($200,000) so he had enough to run his business for the short term, promising to get the returns done and provide a financial statement. The agent complied.
- With the partial levy release secured, what's WATAX next step on the case? We are preparing his 16 17 19 20 21 returns and the 18 return (to fix the IRS SFR) after bookkeeping his 16 to 21 business data for him. Ultimately, our client will owe about $400,000, he will happily use the credits from the levied fund to pay off this debt. He'll get the remaining levied funds refunded to him. And...
WATAX will assist him at removing penalties using the reasonable cause of his family member's death as his extenuating circumstances.