Why you should file a tax return even if you can't pay the taxes
Even if you can't pay the tax, it is better to file a tax return and not pay the tax than not file a tax return at all.
Attorney Tom Olsen: Welcome back everybody my name is Tom Olsen, the name of the show is Olsen on law and I'd to introduce you to Attorney Charlie price Charlie is focuses exclusively on helping average consumers self-employed people and small businesses were there tax problems, I asked Charlie come on the air today to answer a question that I receive from one of our listeners, hey Charlie thanks for being on air with me.
Attorney Charlie Price: Hey, Tom how are you Chris, how are you.
Attorney Tom Olsen: We're doing great thank you hey you know we're fast approaching the tax deadline, I'm getting some emails from people who say that they know they owe income taxes but they don't have the money to pay them, they want to know should they file a tax return and how much would it cost.
Attorney Charlie Price: Hey Tom you're right how am I getting all those calls to and everybody thinks hey if I'm going to owe money let's just not file that tax return because then they're not going to know that I owe money and they're not going to collect, but as I've said a few times on this show that's just a mistake because if you don't file the tax return there's a number of problems but maybe the most important one is that they find you 5% per month of your total tax bill for not filing the return. They're going to get you anyway go ahead file the return so you don't have that penalty among other things and then we can address the tax debt. It just not worth not following the return and then to answer your question what's it going to cost? Well it really depends on if it's just one time they haven't done it and there's a minor tax bill. It's very, very inexpensive for me to resolve that for someone. If it's a more difficult case in multiple years it's a bit more expensive but generally I'm pretty successful in getting a lot of penalties waived and very often it's more than what people pay me to solve the whole case. It's worth coming in talking to me there's no charge the consultation and then if even if they don't retain me I can give us some good advice about how to proceed.
Attorney Tom Olsen: If they file a 2000 tax return and it says they owe money but they know they're not going to make a payment on it because they don't have money. Would they come see you right away or where they come see you when they're ready to start negotiating a settlement with the IRS?
Attorney Charlie Price: I prefer that we be proactive so that we can start preparing. I don't want to wait until they get a final notice intent to levy or more often what happens when people start having their bank accounts or wages garnished is when they first come to see me and then we're in reaction mode. I can't maybe give them all the options they might have gotten if we'd seen them way earlier in the collection process so I always want to see people early rather than late.
Attorney Tom Olsen: When will they start hearing from the IRS if they file their tax return here next week and they owe money they don't make a payment, when are they going to start getting letters and maybe phone calls from the IRS.
Attorney Charlie Price: It really varies a lot and it could be a couple three months to much longer before they put them into what I call the collection sequence. Usually they'll assess the taxes fairly quickly and within the next couple three months typically they'll start sending out their collection notices.
Attorney Tom Olsen: You and I talked a couple months ago that the IRS is going to start using collection agencies where people will be calling you to try and collect taxes how's that coming along?
Attorney Charlie Price: Yes, it still has not started but it's coming. It's coming very soon and this is not going to be for the average person who for instance this year they haven't paid their taxes and then that's the first thing that happens. It's probably going to be for more long-term collection cases that the IRS so far has been unable to collect so the average person initially is probably not going to get that.
Attorney Tom Olsen: All right Charlie tell our listeners our phone number and how they can reach you on the web and apps.
Attorney Charlie Price: Do it from my tax resolution company which is IRS 1099. Go to IRS1099.com or 855 IRS 1099 or can download our app, IRS 1099 or can get our book, I can't pay the IRS now what, by going to www.theIRSbook.com.
Attorney Tom Olsen: Thank You, Charlie, we appreciate it. That's Attorney Charlie Price, of the Price Law firm here in Orlando. Hey folks my name is Tom Olsen, the name of the show is Olsen on Law.