Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.dmtmag.com/i/643476
So You Owe the IRS... BY DENNIS BRIDGES Ugh! Your least favorite cost of all … writing a check to the IRS. At least when you have to plunk down several grand for a transmission overhaul, you get a tangible benefit from that. So let's say you've filed your returns but you didn't happen to have an extra eight or 10 grand lying around to send them a check. What now? Are they gonna send the tax poe- poe aer you? You may be very surprised to learn, there is nothing at all illegal in owing money to the IRS. Even if you owe for several years. It is illegal to go more than three years without filing. As a matter of fact the IRS can charge you with a felony known as Criminal Failure to File. Now in the interest of full disclosure, more oen than not, they would much prefer that you simply file your returns and begin at least putting a dent in your tax bill. What happens sometimes is, the IRS prepares what they refer to as "substitute" returns. ey tax your gross income, at the highest possible rate and, of course, with no deductions. And they can legally pursue this bogus liability against you just as if you had filed the return yourself. We get calls every week from drivers saying they haven't filed for years, but they are getting sky high bills from the IRS for taxes they couldn't possibly owe. What most people don't realize, and the IRS may not even tell you, is that even if the IRS has filed one or more of these substitute returns against you, you still have a right to go back and pursue the over-turn of the substitute return by filing your "real" returns, based of course upon what you netted aer all your business deductions. Now, to be sure, there is a special appeal process to request this relief from the IRS. If you simply have the real returns prepared and send them in through the regular channels, they will go straight in the trash. So if you have received a bill from the IRS when you haven't even filed for three or more years, contact a tax firm that deals with the IRS every day and also knows trucker taxes. Amend More Than 3 Years? Another secret that the IRS doesn't want taxpayers knowing about is this: Most taxpayers, and even most tax attorneys and CPAs, believe that you can only amend tax returns for a maximum of three years. The Internal Revenue Code has a little known provisions that actually allows you to amend any return for which there is still a balance owed to the IRS. Once that balance is paid, then the clock starts running on the three years statute for amending. We have had the good fortune of helping numerous professional drivers both during the current, well-known three-year period, and also during the very-little-known additional seven years where there may be outstanding balances. 16 IT MAGAZINE Vo l . 1 0 , N o . 2