Unfiled Tax Returns

Resolve Unfiled Tax Returns:

If you haven’t filed your tax returns with the Internal Revenue Service (IRS), California Franchise Tax Board (FTB), or California Department of Tax and Fee Administration (CDTFA) for one or more years, you’re not alone. Many Americans face this situation, often due to financial hardship, missing records, or simple oversight. However, failing to file tax returns when taxes are owed is a federal and state violation that can lead to severe consequences, including penalties, interest, and, in rare cases, criminal prosecution. At Tax Lawyers Group APC, our Los Angeles tax attorneys specialize in helping clients resolve unfiled tax returns, achieve compliance, and minimize financial and legal risks.

Risks of Unfiled Tax Returns

Failing to file a required tax return is a serious matter. For the IRS, non-filing can be considered a federal crime under Internal Revenue Code Section 7203, potentially resulting in fines up to $25,000 per year and up to one year in prison. The FTB and CDTFA also impose penalties for unfiled state income or sales/excise tax returns, including:

• Failure-to-File Penalties: Up to 25% of the tax owed for late or unfiled returns, compounding monthly.
• Interest Charges: Accrue daily on unpaid taxes, often at rates exceeding commercial loans.
• Collection Actions: Liens, levies, wage garnishments, or bank account seizures if the debt remains unresolved.
• Criminal Tax Prosecution: IRS or state agencies may pursue criminal tax charges in high-profile cases or when willful tax evasion is suspected, such as underreporting income to avoid filing.

Despite these risks, the IRS, FTB, and CDTFA typically prioritize compliance over tax fraud prosecution, especially if you take proactive steps to address unfiled returns before they initiate enforcement actions. The key is to act quickly and work with experienced tax lawyer who can guide you through the process and protected by attorney client privilege.

Timely Tax Compliance is Imperative:

The longer you delay filing past-due tax returns, the greater the financial and legal consequences. The IRS, FTB, or CDTFA may:

• Prepare Substitute for Returns (SFRs): If you don’t file, the agency may file a return on your behalf, often overestimating your tax liability by disallowing deductions or credits. This can result in an inflated tax debt that’s harder to dispute.
• Escalate Tax Collection Efforts: Unfiled tax returns increase the likelihood of tax liens, levies, or other aggressive collection actions, threatening your property, wages, and financial stability.
• Trigger Criminal Investigations: Willful non-filing, especially in cases involving significant tax evasion, may attract the attention of the IRS Criminal Investigation Division or state tax authorities.

By taking proactive steps to file your unfiled returns and achieve compliance, you can avoid these outcomes, reduce penalties, and open the door to tax debt relief options. At Tax Lawyers Group APC, we help you navigate this process with confidence, ensuring your returns are accurate and your rights are protected.

Tax Resolution Process:

Resolving unfiled tax returns requires a strategic approach, especially if you lack records or face complex financial situations. Our Los Angeles tax attorneys at Tax Lawyers Group APC offer comprehensive services to bring you into compliance and address any resulting tax debt. Here’s how we assist:

1. Reconstructing Missing Tax Records

If you’re missing critical documents like W-2s, 1099s, 1098s, or other records, we can help reconstruct your tax history using:

• IRS and State Databases: We obtain wage and income transcripts from the IRS, FTB, or CDTFA to verify income reported by employers, banks, or other payers.
• Third-Party Records: We gather bank statements, canceled checks, or vendor invoices to substantiate deductions and expenses.
• Financial Reconstruction: If records are unavailable, we use industry benchmarks, expense ratios, or other financial data to estimate income and deductions accurately.

Our meticulous approach ensures that your returns are as complete and accurate as possible, minimizing your tax liability and penalties.

2. Preparing and Filing Past-Due Returns

Once we’ve gathered or reconstructed your records, we prepare and file all unfiled federal and state tax returns, ensuring compliance with IRS, FTB, and CDTFA requirements. This includes:

• Accurate Calculations: We calculate your tax liability, including any allowable deductions or credits, to reduce the amount owed.
• Tax Penalty Mitigation: We identify opportunities to request tax penalty abatement for reasonable cause, such as illness, reliance on a tax professional, or other extenuating circumstances.
• Timely Submission: Our CPAs file your returns promptly to halt the accrual of failure-to-file tax penalties and demonstrate your commitment to compliance.

3. Exploring Tax Debt Relief Options

After filing your returns, we assess the resulting tax debt and explore strategies to reduce or manage it, including:

• Tax Penalty Abatement: Requesting removal of penalties based on reasonable cause, such as medical emergencies or reliance on erroneous advice.
• Offer in Compromise (OIC): Negotiating a settlement to pay less than the full amount owed, often referred to as “pennies on the dollar.”
• Installment Agreements: Arranging affordable monthly payments to satisfy the debt over time, tailored to your financial situation.
• Currently Not Collectible (CNC) Status: Temporarily suspending collection actions if you’re facing financial hardship.
• Tax Bankruptcy: In some cases, discharging eligible tax debts through Chapter 7 or Chapter 13 bankruptcy.

Our goal is to minimize your tax burden and create a sustainable path forward, whether through tax debt reduction or manageable payment plans.

4. Protecting Against Criminal Prosecution

While criminal tax prosecution for non-filing is not common, it’s a risk in cases involving significant tax evasion or public notoriety. We take proactive steps to reduce this risk by:

• Demonstrating Good Faith: Filing your tax returns voluntarily before the IRS or state agencies initiate contact shows your intent to comply, significantly reducing the likelihood of criminal charges.
• Addressing Tax Fraud Concerns: If there’s any suspicion of underreporting or tax evasion, we carefully review your tax records to ensure accuracy and transparency in your filings.
• Negotiating with Authorities: If a tax investigation is underway, we represent you in communications with the IRS Criminal Investigation Division or state authorities to protect your rights and resolve the matter civilly.

Our experience and strategic approach help safeguard you from the most severe consequences of unfiled returns.

Attorney Client Privilege through you Tax Attorney:

At Tax Lawyers Group APC, our Los Angeles tax attorneys bring unparalleled expertise and a client-centered approach to resolving unfiled tax returns. Here’s why we’re the trusted choice for tax compliance:

• Specialized Expertise: Our tax lawyers have extensive experience with IRS, FTB, and CDTFA regulations, ensuring accurate filings and effective debt relief strategies.
• Proven Success: We’ve helped numerous clients file past-due returns, avoid criminal tax prosecution, and secure favorable resolutions, such as penalty abatements or Offers in Compromise.
• Comprehensive Tax Record Reconstruction: Our ability to obtain historical data and reconstruct financial records ensures even complex tax cases are resolved efficiently.
• Proactive Advocacy: We negotiate with taxing agencies on your behalf, advocating for tax penalty relief and affordable payment plans while protecting you from aggressive collection actions.
• Total Tax Defense Solution: Beyond filing returns, we address all aspects of your tax issues, including liens, levies, and tax debt resolution, to achieve lasting financial stability.

Our commitment to personalized service and meticulous attention to detail sets us apart. We understand the stress and uncertainty of unfiled tax returns, and we’re dedicated to guiding you through the process with tactical solutions and clarity.

Common Scenarios for Unfiled Tax Returns

Unfiled tax returns can arise in various situations, including:

• Financial Hardship: You couldn’t afford to pay taxes, so you avoided filing, fearing a large debt.
• Missing Records: Lost or incomplete records (e.g., W-2s, 1099s) made filing seem impossible.
• Reliance on a Tax Professional: An accountant or advisor failed to file your returns, leaving you out of compliance.
• Life Disruptions: Illness, divorce, or other personal crises prevented you from meeting filing deadlines.
• Business Challenges: Self-employed individuals or business owners neglected filings due to complex income streams or cash flow issues.

No matter the reason, Tax Lawyers Group APC can help you address unfiled returns and move forward with confidence.

Don’t let unfiled tax returns jeopardize your financial future. By acting now, you can avoid escalating penalties, collection actions, and the risk of criminal prosecution. At Tax Lawyers Group APC, our Los Angeles tax attorneys are ready to help you file past-due returns, achieve compliance, and explore options to reduce or manage your tax debt.

Schedule a Free Phone Consultation

Contact us today at (310) 788-9820 or email us to schedule a confidential consultation. We’ll review your situation, reconstruct missing tax records, and develop a tailored plan to bring you into compliance. Visit our website for more information on our unfiled tax return services. Let Tax Lawyers Group APC guide you toward a brighter, tax-compliant future.