Dina wrote:

- quote -

how much trouble? a bunch, and yes, you do need the
services of a tax pro, either an Enrolled Agent (EA) or a
CPA.

You say this withholding problem started in January 2002?
When you got your W-2 form for that year you were thereby
put on notice that you had a problem, since I dare say the
amount in block 2 (federal withholding) probably was zero.

You don't want to hear this maybe, but any old refunds for
tax years 2000 backwards have vanished.

So, you need to file both 2002 and 2003 returns, so DO get
professional help, to include working out an installment
agreement with IRS. And no, they do NOT demand your house,
your spouse, or your blood. although they're about to have a
bit of my blood, but that's another story for another time.

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

Leave this to a pro.

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No.

- quote -

I doubt it would come to that.

- quote -

Not in a million years.

Carol

My mind not only wanders, sometimes it leaves completely.

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Dina wrote:

- quote -

I would suggest that you should first consult with a tax
professional who specializes in collection and nonfiler
issues to help you get back into the system. If you contact
the IRS, their response is almost certainly going to be to
file those returns ASAP.

A professional will be able to first determine exactly where you
stand from a tax standpoint.

- quote -

Most likely they will for penalties that are based on
underpayment of estimated taxes, your failure to file a
return and failure to pay the tax due when it was due.
While the IRS can forgive penalties based on reasonable
cause, they normally draw the line on late filing at one
year--they won't forgive more than that.

As well, it may be difficult to convince them that you truly
never noticed this issue over all that time.

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Tax returns need to prepared for the years in question. The
tax due give you the starting point for computing the total
amount due, which will need to be adjusted for interest and
penalties.

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Not really--the prior years will need to be accommodated via
some other mechanism than simply increasing your current
year's withholding. The professional you work with should
be able to go over the options with you.

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In that range, I would think you should qualify for an
installment agreement to pay back the tax. That is, the IRS
will put you on payments.

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They can do that, and are more likely to do it if *they* are
the one to initiate everything.

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You do have rights in this area and a professional who works
in this area will likely be able to tell you what those
rights are.

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I wouldn't likely pick Block--rather, I'd find an
independent EA or CPA who specializes in these matters to
help you through the process. I don't specialize in such
matters, but there are both CPAs and EAs who have extensive
experience in the area.

One warning--those who deal with collections and late filers
almost always require payment up front, for obvious reasons,
only work until that retainer is exhausted without getting
paid more and also tend to impose conditions on continuing
to represent you--such as that you agree to live up to any
commitments you make and a failure to do so will cause you
to be shown the door. The problem is that too often
nonfilers are both slow to pay fees *AND* tend to react only
when the pressure is on.

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Most likely, so long as you come forward voluntarily and
file the delinquent returns, the only "trouble" is paying
for the tax and penalties. And I suspect that should be
manageable as long as you go after the problem now rather
than allowing things to continue snowballing.

--
Ed Zollars, CPA
Phoenix, Arizona

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- quote -

If you claimed 31 allowances on your W-4 form, your employer
would have had to have notified IRS. You should now
complete a new W-4 claiming the proper amount of allowances
based on the worksheet for that form. In the current year,
you may request that additional tax be withheld from your
pay to make up amounts you reckon you will owe. Likely, it
would be best to seek professional help before doing
anything on your own. You say you have low income. If it's
low enough, the possibility exists that you owe no tax.

Having said that, if you have liability from the past or if
you cannot pay the full amount due as shown on your return,
you can ask to make monthly installment payments. However,
you will be charged a one time user fee of $43.00, and you
can be charged a late payment penalty unless you can show
reasonable cause for not paying the tax by April 15, even if
your request to pay in installments is granted. Before
requesting an installment agreement, you should consider
less costly alternatives such as a bank loan.

To request an installment agreement, send Form 9465 (PDF),
Installment Agreement Request with your return or call (800)
829-1040. You should receive a response within 30 days. For
more details on installment payments, refer to Tax Topic
202, What to do if You Can't Pay Your Tax, or Publication
594 (PDF), Understanding the Collection Process.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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- quote -

The easy answer is file your taxes, years 2001-2003. The
refund you may get from 2001 and 2002 will help your 2003
tax bill. Then you can set up a payment plan.

If you don't think you can file the forms yourself, get help.

Helen, EA in PA
50 miles, 3 days, 1 cause - Multiple Sclerosis Challenge Walk for the Cure
October 1 to October 3, 2004
Donate on-line at www.msandyou.org

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I've found myself in something of a jam and am uncertain how to
proceed.
In brief: I make a small income and have always claimed 0 exceptions
on any W-4 I've filled out. I haven't filed my taxes for a few years,
which I know is wrong, but since I've been paying I didn't figure it
was a huge deal. In January 2002 the company I work for switched to a
huge messy automated payroll system. At the same time they changed
our pay frequency and I recieved a raise, so my paycheck changed. I
failed to notice that they also apparently upped my exceptions to 31.
So I haven't paid any federal taxes since then.
I know I have to pay this, somehow, but I was interested in some
advice about the next step.
Should I call the IRS?
Will they fine me if it was an honest (though I know stupid) mistake?
How do I calculate how much I owe in back taxes?
If I figure that out, can I just try and pay it back through paycheck
deductions?
I am figuring it must be in the neighborhood of $6,000. This will
take me years to pay back. Will the IRS dock my pay if they find me?
Can I control how much they take or can they make me extremely poor?
Should I go to a tax preparer like H&R Block?
How much trouble am I in, exactly?
Thanks for any input
Dina

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