Sullivan Consulting tax experts provide both current and delinquent tax (back tax) preparation and bookkeeping services to all types of entities, including individual, corporations, limited liability companies, partnerships and trusts. Tax preparation services provide for the preparation of both State (including multiple states) and Federal Returns.  

Unfortunately, many people allow a minor tax issue to escalate into a major one by not filing their back tax returns simply because they do not have the money to pay the tax.  Here are several reasons why you should file your back tax returns now? 

• Even if you don't have enough money to pay, returns should be filed to avoid further penalties. The failure-to-file penalty is calculated based on the time from the deadline of your tax return (including extensions) to the date you actually filed your tax return. The penalty is 5% for each month the tax return is late, up to a total maximum penalty of 25%. The percentage is of the tax due as shown on the tax return. If your tax return is more than five months late, simply multiply your balance

• Generally, if you are due a refund for withholding or estimated taxes paid, it must be claimed within 3 years of the return due date or risk losing the right to it. The same rule applies to a right to claim a tax credit such as the Earned Income Credit (EIC).

• The statute of limitations for collection of the tax never begins until an assessment is made.

• Neither the IRS or State taxing agencies will allow for an Installment Agreement or a settlement such as an Offer in Compromise unless all tax returns are filed. 

• If you are currently in an installment agreement then the non-filing of a tax return will default the agreement.

• The IRS could file a tax return for you called a Substitute For Return (SFR).  The IRS might not give credit for deductions and exemptions a taxpayer may be entitled to receive.  This could cause the tax liability to be larger than necessary.  Once the SFR is assessed then the IRS will begin enforcement actions to collect the tax (i.e. Tax Lien to secure your assets or a Tax  Levy on your bank account or wages).

• Self-employed individuals who do not file a delinquent tax returns will not receive credits toward Social Security retirement or disability benefits. Failure to file results in not reporting any self-employment income to the Social Security Administration.

Now is the time to get yourself back into the system.  Once the tax liabilities are assessed, Sullivan Consulting will assist you in making arrangements for repayment (Installment Agreement) or making a settlement (Offer in Compromise).

Individual tax preparation clients also have the option of filing their tax return electronically through the IRS e-file system, which decreases the wait for any refund by two to four weeks.  Business tax preparation clients can utilize our financial accounting services to handle your daily, weekly and monthly accounting and bookkeeping needs, as well as special accounting and bookkeeping projects.

As part of our tax preparation service, our professionals identify areas that may produce tax savings in future years. The goal is to maximize tax deductions and minimize taxable income. Financial transactions can often be structured in a myriad of ways, most of which will result in different tax consequences. With proper tax planning and analysis, transactions can be structured to minimize those tax consequences.

Schedule an appointment today to have a licensed professional assist you with all your current or back tax return preparation or bookkeeping needs.