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Back Tax CPA accountant answers FAQ about unfiled tax returns

back tax CPA discusses unfiled tax returns

I offer a free consult on back taxes and back tax returns. (910) 399-2705.

Hi, I’m Gary Bode, a back tax CPA with virtual office. Distance isn’t a factor for utilizing my services. This post includes the back tax State returns as well. Here’s a FAQ list I generated during the 2015 tax season.

What happens if I can’t pay my back taxes?

  • Sometimes a back tax case generates a net refund. I know that’s hard to believe.
  • Accurate back tax returns generally cut the IRS demand significantly.
  • If you do owe back taxes, I’d recommend looking into an Offer in Compromise to see if the IRS will accept less that what you owe, in back taxes, as payment in full.
    • They have an online tool that will tell you if you qualify.
  • If you don’t qualify for an Offer in Compromise, the IRS has Installment Agreements.
  • If cash flow is so bad you can’t make the monthly payments I try to get the IRS to put you into their currently not collectible status.


The IRS demands too much

I see most back tax cases once the IRS takes an interest in your unfiled tax returns. By that time the IRS already calculates a back taxes due figure per their substitute tax return described above. Sometimes they threaten a tax lien. I can’t ever recall a back tax case where I couldn’t reduce the IRS demand for back taxes due. Why? I can’t claim full credit. The IRS substitute tax return just generates grossly inflated back taxes due figure.

Filing accurate back tax returns almost always reduces the IRS demand for back taxes due.

Will the IRS press criminal charges?

It seems unlikely given the statistics. Their probably needs to be some willfull intent to defraud. But I’d get a lawyer involved at the first hint of criminal charges.

Is there a typical back tax return Client?

No. Most back tax Clients seem perfectly ordinary to me. Other back tax CPAs agree. However common issues usually arise in back tax return. Generally that involves a lack of responsiveness from the back tax Client. Sometimes procrastination loses a back tax refund.

Is a back tax CPA expensive?

The cost of producing each sequential back returns is cheaper than if I prepared them on time. But there can be other charges for letters to the IRS, obtaining a Power of Attorney etc. I discuss how to keep my costs as low as possible in the letter of engagement.

There are many types of back tax return cases

It surprises some Folks what type of back tax returns CPAs deal with.

  • Individual. Form 1040, U.S. Individual Income Tax Return.
    • Schedule C for sole proprietors Schedule C (Form 1040), Profit or Loss From Business.
  • C Corporation. Form 1120, U.S. Corporation Income Tax Return.
  • S, U.S. Income Tax Return for an S Corporation
  • Payroll, Form 941, Employer’s QUARTERLY Federal Tax Return (sic).

Losing refunds

I’ve seen back tax returns generate nice refunds. But the IRS doesn’t issue refunds after three tax years. Every back tax CPA has horror stories of clients losing refunds through procrastination. Sad but true.

Back tax returns for your State

If your State requires a back tax return they won’t accept that back tax return until the IRS processes the federal back return. I’ve talked with other back tax CPAs and the States are problematic. If they demand tax you don’t owe during the interim between the IRS filing and accepting the back tax return you could logistic issues that include nasty tax notices etc. Talk to your back tax CPA about this issue.

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