I didn't file because I was working as a 100% commissioned rep, and I wasn't making much money and I got behind on my bills. I filed the last two years, but the Gov didn't indicate any wrong doings when I filed for 2005, and 2006. I'm concerned that I'll be audited for tax evasion can this happen? I'm also looking to get into law enforcement and i'm concerend that they will find this out during my background investigation. If I filed the last two years and I got no complaint from the Gov, then does that mean according to their records i didn't do anything wrong?
2007-07-26 10:18:32 · 5 answers · asked by Lions2007 1 in Business & Finance ➔ Taxes ➔ United States
No way to really know if you owe the government or not without figuring out your income and expenses. With you being a 100% commissioned rep though, I'm assuming that you received a 1099 at year's end instead of a W-2. That means that you are possibly subject to Self-employment (SE) tax. This tax must be paid when your net profit for a self-employed person is >$400. You need to figure out your returns asap. If you owe for any of those years 2001 - 2004 you will still owe taxes, also interest and penalties. If for some reason you are owed a refund, the only year you can still collect the refund would be for 2004. There is a 3 year limit to file a tax return for a year you are owed a refund. As far as not having heard from the govt about past years taxes, it just may be that they haven't gotten around to you yet, but they probably will.
2007-07-26 10:27:10 · answer #1 · answered by Anonymous · 0⤊ 0⤋
If you were working in a job during those years and weren't having taxes taken out, you almost surely owe money since even if you didn't make enough to owe income taxes, you'd owe self-employment taxes (social security and medicare) if you make over about $400 a year.
When you file, the IRS looks at each year separately, so the fact that they didn't indicate anything wrong for 2005 and 2006 doesn't let you off the hook for the earlier years. And yes, you could still get caught for those earlier years, and still owe the tax for those years.
To get legal, you need to gather up your info on your income and associated expenses for 2001 to 2004 and file the returns, and pay whatever you owe. If you can't pay it all at once, the IRS will set up a payment plan.
2007-07-26 11:39:00 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
File the tax returns even though the IRS hasn't contacted you. Just because you filed late does not mean you are red flagged and will be audited. IRS realizes that things happen in peoples life, illness, death, job losses, financial. It is better you approach them and come clean then for them to come after you. Go to a tax preparer with all your information. Streamline all data to save in processing time to minimize the preparer's fee. Ask around for a name of a good tax accountant/preparer. Like one responder said, don't go to a franchise. I call them the fast food of tax preparation. You'll get through it. Good luck.
2007-07-26 10:58:03 · answer #3 · answered by IRENE THE BOOKIE 3 · 0⤊ 0⤋
Go to a tax accountant (private, not a franchise); take all the earnings statements of any kind; together with all expenses you incurred to do your business; and taxes you paid to the state, or home; and have him file for you. DO IT NOW The penalties will continue to accrue because you didn't file.
IT ISN'T THE TAX YOU OWE that sends you to prison, it is EVADING THE FILING OF TAX RETURNS. Get thee to a tax person and right now.
2007-07-26 10:22:31 · answer #4 · answered by ? 5 · 1⤊ 0⤋
Well if you don't owe. Then they won't be too infuriated. You just gave them money. If you did owe. Big doodoo so to speak.
Go to a Certified accountant ASAP and get that taken care of.
2007-07-26 10:27:49 · answer #5 · answered by James G 2 · 0⤊ 1⤋