5 Common Reasons Why People Don’t File Their Tax Returns

People often ask us, “Why would people not file their last couple years of tax returns?”

Here are a few common scenarios:

  1. Growing a business, running a business is one of the most time consuming and challenging aspirations one can take on. Business related tax returns are much more complicated than your typical 1040 with two W2’s. The accounting can be even more complicated, especially the balance sheet. If this is you, call us to help you with your current business taxes, and to help you get set up with the right system that can help you move forward year to year.
  2. Fear of owing significant tax debt, typically when paid as a 1099 contractor, the taxpayer is going to owe quite a bit of taxes because he/she did not make quarterly estimated tax payments. It’s better to face it head on and file a tax return owing, rather than not file at all. Lot’s of people have tax debt, its not that big of deal if an installment agreement is made. The IRS is not allowed to make the taxpayer destitute. Let us help you get back on track with your taxes.
  3. Personal Issues. Rough divorces, addiction/alcoholism issues, or serious medical issues contribute to unfiled taxes. There are tens of thousands of people in these situations!

We love helping people get back on track. Our goal is to reduce the amount owed or maximize the refund.

  1. Death in the Family. It is fairly common that one spouse handled preparing the tax returns for many years. Once the spouse passes, the wife or husband left has no idea what to do, especially when a business is involved.
  2. Overwhelmed with the details, missing many tax documents, and don’t know where to start. We can help with this! Our advice to someone who has not filed in the last few years, is to focus on getting the last 6 six years of tax returns filed. We prepare an IRS power of attorney, form 2848, and can obtain the wage and income tax transcripts for the 6 years. Then the tax returns are prepared from the earliest year forward.

After all tax returns have been processed and the taxpayer receives the IRS notices, an installment agreement can be setup to pay over 72 months. If the tax debt is very large, often the IRS requires a 433a to filled out which shows all your personal expenses and what you can reasonably afford to pay the IRS each month.

People tend to think they are alone in the fact that they have not filed on time, or ashamed that they have not filed their taxes. Don’t worry! We prepare past tax returns all day long. You are not alone. We have got your back! Call us or visit our website to set up an appt. https://simpsonaccountingllc.com/