My friend has never paid taxes and he wants to. How should he go by it?

Question

My friend is in his late twenties and wants to pay before he gets into a huge problem or before debt gets too huge. How should he go by it?

Answer 1

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Answer 2

Well that depends too on whether he is self employed or whether he worked for someone else.  If he worked for someone else he will need his W-2 forms and applicable tax forms which you can get at the local library or by calling the IRS 1-800-829-1040.  If he is single it is probably just a 1040EZ which he can do himself.  Also, how many years are we talking here.  If he worked for someone else chances are that the IRS owes him money and don't forget to file the State returns too.  You can get them by calling the State or the Local Treasurers office.  When you file the State return make sure to attach a copy of your Federal Return to it and it really isn't that hard.  He really doesn't need a professional.  All he really needs is a calculator.  If he gets a professional he is going to have to pay them to do his taxes.  Also, he can get an instruction booklet for the form he is filing from the IRS when he calls to get his forms.  Another thing is that the IRS has local offices and if you take your stuff in there they will show you how to file your taxes and help you for FREE.

There it isn't that hard.

Answer 3

You know the story - get him to get his taxes figured - by a pro (a CPA) - ASAP.  18% interest is very rough - add on 25% penalties and he's now paying half again as much as he started with.

Secondly, if he's behind for more than one year, he needs to approach a tax attorney service - they're on the web - you can find them.  Take the calculated taxes - sooner than later - and turn them in, they'll operate on your behalf.  They're not bad and I've had friends and customers use them.

The big thing - DO NOT DELAY and when you get a payment arrangement going - stick to it.  I put a link in from my blog that I wrote months ago on the payment programs and its various issues.  I hope you like it.  (The fairies are the hold music the IRS plays.)

Answer 4

Start by getting professional help either through a decent accountant or tax attorney....it would be worth it to have guidance if he is really behind.  Otherwise, contact the IRS--they normally have someone who can help as well as pay back plans, if he can't afford to pay all up front.

Answer 5

I'm assuming that he has been working during many of those years and has made enough at least in some of the years that he was required to file.

For years when he worked as an employee, had taxes deducted, and got a W-2 for the income he made, he probably doesn't have a problem.  Technically he was required to file.  But if the IRS never contacted him about not filing, it sounds like he had refunds coming.  If so, for years  before 2005 he's too late to get his refunds, but he's not in any trouble and doesn't owe anything for those years.  He can file returns for 2005, 2006 and 2007 and still get his refunds.

If he was self-employed, then he DOES most likely owe, and should gather up his records of income and related expenses from those years and take them to a CPA.  And not to someplace like H&R Block - fixing this is beyond most of their preparers.

Answer 6

This is a question I get often. First of all the worst thing you can do is ignore the situation. It is possible the IRS has filed tax returns for your friend if he had income reported under his social security in any given year. If the IRS did file returns for him, there may be current assesments outstanding, tax liens and the IRS may be able to take enforcement action against him (ie...wage garnishments, bank levies etc..). It is also possible he had enough withholding and payments to not have a liability. Still he may wish to file the more recent years asap so that he can collect any refunds he may still be entilted to. Typically what I do in this situation is to contact the IRS and find out what status the taxpayer's account is currently in, which tax return years the IRS and/or State is seeking returns for, and if there are any assements currently outstanding. The next step would be to secure a collection hold as necessary, file any returns required to get him back into compliance and set him up on a payment solution that works for him if there is a liability. I have alot of good information on my website that should provide you both with more answers. It is there for your review free of charge. You are of course welcome to contact me as well if he decides to hire professional representation. There is never a fee or obligation for the initial telephone consultation. Hope the information helps. Rest assured there is a solution that will work for everyone. Just make sure he doesn't ignore it any longer.  That is the worst thing he can do and could end up costing him a great deal of money and stress.

Christopher R. Jacquez

President, eTaxrelief.com