Haven’t Filed an Income Tax Return?
Filing a past due return may not be as difficult as you think.
Taxpayers should file all tax returns that are due, regardless of whether full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. It is important, however, to know that full payment of taxes upfront saves you money.
Here’s What to Do When Your Return Is Late
Gather Past Due Return Information
Gather return information and go visit a professional tax preparer. You should bring any and all information related to income and deductions for the tax years for which a return is required to be filed.
Payment Options – Ways to Make a Payment
There are several different ways to make a payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, money order, cashier’s check, or cash.
Payment Options – For Those Who Can’t Pay in Full
Taxpayers unable to pay all taxes due on the bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be lessened. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, a temporary delay, or an offer in compromise.
Taxpayers who need more time to pay can set up either a short-term payment extension or a monthly payment plan.
- A short-term extension gives a taxpayer up to 120 days to pay. No fee is charged, but the late-payment penalty plus interest will apply.
- A monthly payment plan or installment agreement gives a taxpayer more time to pay. However, penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan. In terms of how to pay your tax bill, it is important to review all your options; the interest rate on a loan or credit card may be lower than the combination of penalties and interest imposed by the Internal Revenue Code. You should pay as much as possible before entering into an installment agreement.
- A user fee will also be charged if the installment agreement is approved. The fee, normally $105, is reduced to $52 if taxpayers agree to make their monthly payments electronically through electronic funds withdrawal. The fee is $43 for eligible low-and-moderate-income taxpayers.
What Will Happen If You Don’t File Your Past Due Return or Contact the IRS
It’s important to understand the ramifications of not filing a past due return and the steps that the IRS will take. Taxpayers who continue to not file a required return and fail to respond to IRS requests for a return may be considered for a variety of enforcement actions.
Please contact us if you have any questions.
I’m Back with “Who is”
Okay, things have settled and for the most part organized. Taking up this blogging thing again as before; Monday, Wednesday, Friday, with a recap of the past week on Sunday’s. I have missed being active regularly and I have been missed, but things are going strong again.
For my readers who have hung with me thank you. I apologize in advance for the repost below but given everything, I find it necessary.
So much talk about hiring a tax professional and so much debate about who is a professional I want this out again.
The biggest point I want to make is that just because someone is a CPA, doesn’t automatically make them a tax professional.
Tax professionals are hard to find because as you may have heard, there is no accreditation from the AICPA (American Institute of Certified Public Accountants) that says “Tax Professional”.
Hope you enjoy my return to active blogging.
Repost of Who is. . .
As a tax preparer I am often asked what is the difference between a tax attorney, an accountant/CPA, a bookkeeper, an Enrolled Agent, and a tax preparer.
A Tax Attorney is not the same as an accountant. The accountant can work with the financial issues and has a general knowledge of tax laws; however a tax attorney is a specialist in all aspects of tax law. Although they often work closely together, they are two complete different services. Typically large and even small businesses will meet with a tax attorney once every quarter or once a year to ensure that they are making the best possible business choices with regards to investments and tax issues. Since the taxation laws change constantly, this is an important step.
A Bookkeeper is responsible for keeping accurate, up-to-date business records for proper cash flow management, balance sheet preparation, and developing expansion and investment plans. A bookkeeper also assists in filing tax returns with updated tax records. Accurate bookkeeping is a legal requirement and should be kept well within the standards that are set by local and federal tax agencies. A bookkeeper accurately records all of the financial transactions. It is the responsibility of bookkeeper to note all monetary transactions that are received and paid out. The records also include outstanding balances that the company owes to other parties and others who owe to the business. Business bookkeeping takes a lot of time and cannot be done in a hurry. At small businesses, bookkeepers also double as company accountants. Perhaps bookkeepers have the biggest responsibilities in the company as business planning, payroll management, and tax return preparations are dependent on accurate bookkeeping. Bookkeepers often do not have the qualifications or certifications of accountants, but the responsibility is not any less. Bookkeepers that have a great deal of experience can market themselves as accountants or managers. For that, they also need to supplement their profession with certificate courses, seminar attendance, and on-job training. All types of businesses require bookkeepers who are experienced in their specific business functions.
Accountants keep track of a company’s money. The company’s managers and people outside the company read their reports. Managers look at the accountants’ reports to see how well their companies are doing. There are four kinds of accountants:
Public accountants work for public accounting companies. They do accounting, auditing, tax, and consulting work. Some have their own businesses. They do many different kinds of accounting for people outside the company.
Management accountants keep track of the money spent and made by the companies for which they work.
Accountants generally work a standard 40-hour week, but some work 50 hours a week or more. Tax accountants often work long hours during the tax season, from January to April. Most accountants have a college degree in accounting. Public accountants have to take a special test as well, resulting in a certification. Public accountants also must have a special license from the State in which they live. Accountants are generally good mathematicians, and have good analytical skills.
An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. “Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS. Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS. The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department.
A professional Tax Preparer is an individual who prepares tax returns. A professional tax preparer can be a Tax Attorney, an Accountant/CPA, a Bookkeeper, an Enrolled Agent, or anyone who professionally prepares tax returns for clients. Most return preparers are professional, honest and provide excellent service to their clients.
So there you have it.
How do you choose the right one to prepare your taxes? There is no one factor to use in determining this. I suggest you read the IRS Tips for Choosing a Tax Preparer. Or my website page Finding a Qualified Tax Preparer. I would also hope you to read 5 Biggest Mistakes most taxpayers make when choosing a tax professional!
Getting it right
Five days ago I read a post on a topic that is of interest to everyone. The author of course responded to my comment. AN up and coming CPA/tax blogger gave a note where, of course, the author responded, and I put in another two cents worth. At this point, a new voice entered with a statement and some questions.
I hope now to answer those questions, and maybe a few others.
This all started simply enough because of a 2003 Study. Findings were such that CPA Prepared Returns Result in Fewer Audit Adjustments than Returns Prepared by Non-CPAs
I made the comment that maybe this study was not entirely accurate. Not because of the study itself, but because taxpayers blindly believe that a person with CPA behind their name means they are tax preparation experts.
For the record, just so you know, just because somebody has CPA behind their name, this does not make them a “tax professional”.
In a post from another tax blogger, she was thinking about all the fancy credentials the AICPA offers for CPAs to specialize – financial planning, fraud examination, business valuation – and wondered how to become a certified tax expert. A representative of the AICPA (American Institute of Certified Public Accountants) responded to this saying, “We do not offer a credential in taxation. In general, our approach has been not to develop credential programs around areas for which the public already believes CPAs to ‘own’.”
As I read this I was amazed that someone representing the AICPA actually admitted that the general taxpaying public blindly believes that just because someone is a CPA they own the title of tax professional.
Again, A CPA designation does not by itself qualify as tax expert. Other than EA (Enrolled Agent), there is no real designation available to be obtained to verify or prove a Tax Preparation Professional. There needs to be.
I suggested then that we needed to educate taxpayers in the difference of just a CPA and a tax professional (who by the way could be a CPA).
As it was pointed out to me, who would pay for this, who should or would be charged with this responsibility?
The comment that sparked this post – “I think the industry should accept that it has taken certain missteps along the way and repair that. . .”
In an annual report by National Taxpayer Advocate, Nina Olson said that she would work with the Inspector General for Tax Administration to develop regulations for presently unregulated (commercial preparers who are not attorneys, CPAs or enrolled agents) tax preparers.
To me this is misleading. I mean it is being proposed that those who are not attorneys, CPAs or enrolled agents aren’t regulated. When in fact they are governed by the same rules as those preparers as who are attorneys, CPAs and enrolled agents. (We are talking about what is commonly referred to as an un-enrolled preparer.)
So to clarify, According to Circular 230 (Circular 230 contains the regulations governing the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries, and appraisers before the IRS.) a preparer is defined as “An individual who prepares and signs a taxpayer’s tax return as the preparer, or who prepares a tax return” And preparers are governed by the regulations described in Circular 230, including ethics.
If you are an Attorney, CPA, EA you are afforded more mobility within the IRS to act on a taxpayers behalf as also described and regulated by Circular 230.
As it stands right now, anyone can claim to be a tax preparer. There are no guideline as to education requirements, or continuing education requirements. This concerns people, as it should.
I am considered an un-enrolled preparer. By all means I am all for a change. Somewhere somehow there needs to be some sort of something, be it college education and designation or Federal licensing. There needs to be something. To assume this needs to only be done for un-enrolled preparers is pompous.
Any preparer, whether you are un-enrolled, a CPA, an Attorney, and EA, whatever they are, there needs to be something for everyone who signs as a preparer. A standard for all who assist taxpayers in the preparation of their return.
Forms, Schedules and Worksheets
Forms, Schedules and Worksheets – A very special offer for tax professionals, a taxguy review.
From the desk of Robert D. Flach of TAXPRO SERVICES CORPORATION and ROBERT D. FLACH, LLC tax preparers are given a great offer. Robert is also THE WANDERING TAX PRO.
If you are not a professional tax preparer I say so what, you’ll find the majority of these very useful to you as well.
All professional preparers have forms and worksheets we use for various reasons. What store did you buy yours from? Mine are a mix from Greatland and the NATP store. I have a few of my own and have been working on my own client questionnaire for a few years now. Still mine has many bugs to fix as it has far too many pages.
What Robert has created here is more.
Robert has these forms, schedules and worksheets designed wonderfully for their purposes.
The Cell phone log is perfect for taxpayers to log the cost of their business use of their phone. I don’t know about you but I have several clients that send me the years bills and pay to have me sort this out. With the cell phone log, they won’t be paying me for an hour or two, as they’ll have the expense at hand and all I will need to enter the amount. They have a reference form in case of an audit.
Ever need to add a supplement to Schedule A? In this collection there is one made out perfectly.
The Medical Expense Worksheet has lines for insurance premiums, long-term care insurance, doctors, dentist, therapist, nurses, hospital bills, Lab Test, prescription and just everything that sure you could run across including breakdowns of your mileages and other medical traveling expenses.
The Charitable Contribution Listing worksheet is exactly what taxpayers need to document their donation/s. Including instructions as to what is and what isn’t deductable. As there are several types of deductions, there are several types of worksheet for taxpayers to use in this package.
Do you have continuing education expenses? Do you file Schedule C? Need a mileage log? A business travel record? What about an employee time card? Do you need or have a comprehensive worksheet for clients who have a home office? Need a worksheet to have cost basis lined up? Do you own rentals – A multi-family building? How well is your worksheet for figuring AMT?
The point?
Robert Flach has been preparing taxes for a great many years (over 35) and is very knowledgeable in his profession proven time and time again in the articles he writes for his blogs/websites as well as others including here. The TAX PROFESSIONAL FORMS, SCHEDULES AND WORKSHEETS that are being offered are a great resource for preparers and taxpayers alike.
These documents are in MS Word format and thus cannot only be used as much as you need, but can be edited to best fit your practice and/or needs. I will be using several as is, and making slight changes several others. $5.00 is very gracious considering the time these will save everyone. Not to mention the time that was put into creating them. Every reader of TWTP needs a copy of these, even if just to check yourself and/or your practice.
Yes everyone. Robert advertises them for tax professionals, but it is my opinion those taxpayers who are busy doing their own will benefit as much as any tax preparer.
For information to get yours now, go to A VERY SPECIAL OFFER FOR TAX PROFESSIONALS. The information for getting your copy is there.
Prepare your taxes on-line With L & R Tax Preparation
L & R Tax Preparation
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Including online services.
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