What if someone didn't file their taxes for a few years and the professionals they hired failed them?

Question

What if someone didn't file their taxes for a few years and most of the time they wouldn't owe anything and some of the years they owed a little bit? And they hired a company called NADA and paid them a few thousand dollars and the company kept acting like they were helping but in the end kept acting like all the paperwork was lost and to keep resending it. Then the person hired a tax accountant who worked with them for a while and then the person started having their wages garnished and the tax professional won't answer the phone calls. Can the person get the amount owed reduced? They can't buy afford to buy groceries? Is there interest and penalities accruing on the amount owed even if wages are garnished? How can you sue NADA and/or the tax professional? If the person is married but the spouse owned their home previously, can the home be taken?

The tax professional is an attorney. How can you know who is good and who isn't?

Answer 1

There are several issues here. I am going to address what to do on the back federal taxes. You are going to have to deal with the state taxes depending on your state rules and regulations.

First, file all your returns. One penalty that you are being assessed is failure to file. That will stop that penalty and the related interest. In addition, it is a criminal offense to not file a federal tax return. Also, the government has two sets of rules on dealing with delinquent tax payers. The rules for people who have not filed limits your alternatives.

File the returns with the best available information. You can still amend returns. If you have no information, you can get the information on file with the IRS, by filing Form 4506-T.

Keep a copy of every thing you file by year.

Once you have filed your returns your have a couple alternatives depending on your circumstances. You can negotiate a settlement. You can work out a payment plan.

Answer 2

Something is very strange here. If you had worked with ONE bad professional, wouldn't be a total surprise - but two? Either you're having the world's worst luck, or something is left out of the description of the problem. Well, it's possible you just had lousy luck in finding professional help. Check with a CPA and see if they can help you sort all this out.

For the years where you didn't file but didn't owe, there wouldn't be a penalty - you would still need to file, and any refund older than 3 years would be lost - you'd still get refunds for the most recent 3 years.

For the years you owed - depends on your definition of "owed a LITTLE BIT" - also of course depends on your definition of "a few years". There would be taxes and penalties on the amount owed, and it wouldn't take real long for them to add up to as much as, or more than, the original tax owed. And yes, interest and penalties continue to accrue on the unpaid balance until it's all paid off.

It's possible that you can get the penalties and interest reduced.

If the spouse owns the home in their name only, the home probably can't be taken, but that could depend on where you live.

Good luck in getting this sorted out.

Answer 3

Normally you would have to go back and file for all the years you didn't. For years in which there is no tax due you would not have interest and penalties. It is possible to have interest and penalties on the years you did owe. Usually the IRS is willing to settle for less than what is owed. Also, there are graduated payment plans so that you don't have to pay all at once. Sounds like you got screwed over a couple times. Go to a trustworthy CPA next time.

Answer 4

Time to call an attorney.

Answer 5

they would eventually go to jail for tax evasion, and get all they're belongings sold off