The first IRS problem would be if you have not filed tax returns for several years. After 3 years, the taxpayer will not get his refund if one is due him. The IRS does have penalties for late filing of returns when there are taxes due. To solve this problem, you can try do the returns yourself if you can find the blank forms. You can also call a tax expert who deals with this kind of problem all the time. The Enrolled Agent (the tax expert) can get the income information that may have been misplaced. They can talk with the IRS and get you current with filing. The Enrolled Agent can also negotiate a payment agreement.
Another IRS problem some taxpayers have is the dreaded letter with an Internal Revenue Service return address. The Enrolled Agent can help reply to these letters. Some may be a simple answer and can be handled by a phone call or letter. Others may be more complicated. Don’t wait until the day the letter has to be answered. It is easier if the EA has time to research the problem.
There are several letters the IRS sends out, from “you missed reporting some income that was reported to the service,” to “we are auditing you tax return,” to an “intent to Levy” the taxpayer’s assets.
The “We are going to audit your 20XX tax return” letter should be answered by an Enrolled Agent. They are trained to respond to all sorts of situations regarding audits. They will know exactly what the IRS wants.
The only letter worse than the audit letter is the Intent to Levy Assets letter. This letter is a collection letter for past due taxes, and is nothing to take lightly. You could find all the money gone from your bank account one day. You will probably need professional help with this, and an EA knows what to do.
–Peggy Beasterfield, EA, Peggy’s Tax and Accounting Service