I never filed my tax return for 2003 and I just got a huge bill from the IRS. Am I screwed?

Answer 1

phillipfostercpa knows just enough to be DANGEROUS. There is a 3 year statute of limitations to ASSESS taxes. That means the IRS had until April 15, 2007 to determine you owed money. The 10 year COLLECTION period, did not BEGIN until they assessed taxes.

You should complete a return for 2003 yourself or with help. The IRS calculation is always the maximum you COULD owe without accounting for deductions and credits you may be entitled to. Any refund you could have claimed is now lost, but your tax liability is probably less than they computed.

EDIT: I keep seeing answers here claiming a 10 year Statute of Limitations for collecting taxes. I have yet to find a CREDIBLE source for that claim. The closest I can verify is that a Tax Lien is good for 10 year IF NOT RENEWED.

Answer 2

Several points: 1. The three year statute of limitations for the IRS to assess the 2003 tax did not start against them until you file your return, which you have not. 2. They figured your tax based on W-2s, 1099s and other information provided to them. If you have deductions, they have no clue about them. 3. You did not indicate if you have not filed for other years. If you file a return for 2003, 2004, 2005 and 2006, you may owe a lot more. That would be your opportunity to file an application for an installment agreement or an offer in compromise. The offer in compromise could be to pay them a lump sum (always a tough play) or to offer to pay part of the tax liability over time. Good luck and DO NOT IGNORE your tax problem. 4. The IRS does have a 10 year statute of limitations on collection, 26 USC section 6502(a). ("(a) Length of period
Where the assessment of any tax imposed by this title has been made within the period of limitation properly applicable thereto, such tax may be collected by levy or by a proceeding in court, but only if the levy is made or the proceeding begun--
(1) within 10 years after the assessment of the tax..."
If the 10 year period is coming to an end, the IRS can ask the US Attorney to sue you to reduce the tax liability to judgment. As a judgment in favor of the US government, it will not be subject to any statute of limitations.

Answer 3

Woody,, it's about time for you to file that 2003 tax return,, don't you agree?
more than likely the IRS sent you a bill for tax on the entire amount you made for 2003 with no deductions etc. So after you get that tax return filled out you will be looking better,, but will still be paying failure to file penalty and interest, etc. The bill will be worse than if you'd paid on time,, but the bill won't go away so the sooner you file and pay the better off you'll be. I assume you didn't plan to get a refund for 2003? if you did,, it's too late now,, time for refund on 2003 has expired.

Answer 4

Yes, you're screwed. Maybe not. Get all your paperwork from 2003 and file your return. The IRS probably estimated your taxes based on the information they have. If you file and you calculate that you owe less than they figured, you'll only have to pay your calculated amount. But you will still have to pay interest and penalties.

Now the bad news. If you figure you have a refund coming, you've lost it because it's past the statute of limitations of 3 years past the original due date of 4/15/04

Answer 5

Yes, probably. Why didn't you file your return??? It's always better to file on time (even if you can't pay). You will get stuck with huge penalties/interest for failure to timely file/pay. That's what happens when you don't file your return. The IRS is "kinder, gentler" now and they will let tax delinquents string them out for years with outstanding balances, but they aren't so nice if you just don't file your return. I'm assuming you are probably being billed for more interest/penalties than you would have had to pay if you had just filed your return and set up an installment plan. Depending on how much you owe, you should probably consult a tax attorney or CPA with speciality in dealing with the IRS and have someone help you file a properly prepared late tax return. IRS can file liens against your property (even your home), future earnings, and garnish your wages. If they levy against you, they will send letters to previous/current employers and anyone that gave you a 1099 in order to determine if any of these people owe you money so they can seize it. My advice......get professional help immediately. Many tax professionals are skilled at dealing with the IRS and can probably help you avoid being garnished or having liens placed on your property. The good thing is unless you owe an enormous amount of $ (tens of thousands), then they will probably just work with you. You may want to see if you can set up an installment plan. I believe the minimum payment they will allow is $45, but you can "string them along" for many years as long as you show that you are making an effort to pay. Good luck.

Answer 6

Be very careful. The IRS can do an selection selection to Returns on you base on what's common because the internet worht technique. Its jut a posh accounting nomenclature for all of your prices must have source of money or barter. once the IRS receives an exams. once you've a agency that which have some fairness, they grab it, they could grab even your delapidated motor vehicle. you're entitled as a agency proprietor on $3000 exemption. If its blatant sufficient, they could upload consequences as a lot as one hundred% relying on the seriousness through the quantity and the frequency you commit fraud. There are some those who falls by the cracks. study the case of Joe Bannister.he replaced right into a CID agent for the San Jose, CA IRS, He replaced into also a CPA. they found him no longer in charge of evasion. bypass google the case on your pupil personal loan why do not you pay what you tink you owe and thedifference will be an accord & pride

Answer 7

CAUTION!!!

1) The 10-year Statute (not statue) of Limitations did not start on April 15, 2004; rather, it started on the date the IRS assessed the 2003 income-year taxes, in this case, and, perhaps, recently!.

2) I do not advise going underground with an employer who pays cash, "under the table." Both you and that employer would be responsible for fraud, with intent to evade taxes, which can bring you, both, some prison time!

********************

Yes, pull together the best records you can find, and include, by all means, what the IRS already has on their transcript. The IRS will gladly fax, or mail, the transcript to you, at no charge. Just call 1-800-829-1040.

If you, like many people, don't "have the stomach" to call the IRS for the transcript, yes, choose a good EA, CPA, or tax attorney, and give him/her a special Power of Attorney (Form 2848) to do it for you.

File the return. It is highly likely, as others have suggested, that your income taxes, as calculated by you, or by a professional tax preparer, will be much less than that calculated by the IRS, on their "Substitute Return."

Phil
http://www.phillipfostercpa.com/tax.html

Answer 8

You can either agree with the taxes as figured by the IRS, or disagree.

If you agree that the taxes are correct, then you need to pay by the date indicated on the letter or face further penalties and interest. Unless they are requiring a return at this point, the letter may already have figured your taxes, and if you pay what is shown immediately, you are finished and not required to submit a separate return.

If you can reduce your taxes by filing the 2003 return, do so immediately and pay the amount you figure, plus penalties and interest. In particular, if you had sales of stock, your gains may be less since the IRS figures the basis to be zero.

Keep records of all communication of course.

Answer 9

It is possible that the amount that the IRS assessed you will go down if you file a return. They base their amount on filing with standard deduction and no credits.

By filing a return, you may reduce the amount that they say you owe. Its also possible that you over paid. That's the good news.

The bad news is that if you show a refund on your return, you will not get it. The statue of limitations on claiming a refund for your 2003 return was April 18, 2007.

Answer 10

Sometimes the IRS overstates the bill for non-filers, so you may not owe as much as is on the bill. However, you can expect to pay more (and in my opinion should pay more) than if you had filed and payed timely. I think you should seek the profession help of a tax expert. Now is not the time to go low cost... find someone who is experienced and knowledgeable.

Good luck!