Haven't Filed Taxes in 5 YEARS?

Question

My fiancee hasn't filed his taxes for the last 5 years. he worked for a construction company that paid him with a business check and no federal/state/social security or anything else was taken out of his check. That was 4 years of the 5. And he did not file this year either. After I explained to him how serious this is he has decide to file his taxes and straighten out the whole thing before the year is out. What is our next move.....
He doesn't have any of his W-2 forms form the construction job if it matters at all. Any advice would be appreciated Thanks So Much

Every year he worked for the construction company he was given a W-2 form but he just never went and filed his income tax.
There is no reason to be so nasty we are just two people looking for some helpful advice.
Some of you have given some really good advice and I appreciate it but if you dont have something helpful to say than do me a favor and shut up

Answer 1

He won't have a W-2 from the construction job, because with the construction company paying him with a business check they are treating him as an independent contractor. I'm surprised that the IRS has not contacted your fiance yet, as I would think that the construction company would have given him a 1099-Misc at year end. Your fiance has been considered self-employed for those 4 years (I'm assuming that for the 5th year he was on payroll and getting a W-2?) and needs to file tax returns and file a Schedule C to report the monies paid to him by the construction company, and also any expenses he had with earning the money. Your fiance will report the payments to him as income on the schedule C, and will report expenses incurred in earning the money (mileage to construction job sites, tools, equipment, supplies, etc). Since your fiance has been self-employed he will have to pay Self-Employment (SE) tax in addition to the regular income tax (he will also need to file state income taxes as well). Self-Employment tax is 15.3% of 92.35% of net self-employment income. In addition to the SE tax and regular tax your fiance will have to pay penalties and interest on those years.

His best bet is to look in his local yellow pages for a CPA/Tax Preparer and contact that person to prepare his taxes. That way the CPA/Tax Preparer can take every expense that your fiance is legally entitled to take in earning the money that he earned.

If for some reason that your fiance is owed a refund for any of those 5 years he can only file a return for a refund for the last 3 years of returns (2004, 2005, 2006). That is the statute of limitations for filing and getting a refund. There is no statute of limitations if you owe taxes and have not filed a return.

Your fiance should not have put off filing his tax return, but at least it's a good thing that he is willing to straighten out the past. Just to let you know though, that if you and he do marry and you file a joint return, the irs can take a refund for the joint return and apply it against his past tax liabilities.

Answer 2

I would question if he was properly treated as a non-employee. Some employers treat employees as independent contractors to avoid the costs of employment taxes and workers compensation insurance. He should submit a Form SS-8 to IRS for a ruling about his status. You could trigger an employment tax audit of the employer. In my state, California, he has to have a contractor's license when doing anything other than handyman level jobs or can be charged with a felony.

If he doesn't have his W-2s or 1099s, IRS can provide him an information returns transcript if the employers filed them.

Income from self-employment must be reported on an income tax return within three years of the original due date of the return or social security credit for the earnings is lost. This will have a negative effect for the rest of his life. Self-employment tax (Social Security for the self-employed) is still due.

Until any taxes due are paid, this guy is going to be an albatross around your financial neck. If you still want to marry him after you find out how much of a mess he is in, going to a family law attorney to draw up a prenuputial agreement will be money well spent.

Answer 3

The right thing to do, of course, is to pay the back taxes. He will be charged penalties and interest by the IRS in addition to the taxes. He'll have to go back to the company to get a copy of the W-2 forms. I'm surprised that the IRS hasn't come after him since they also get a copy of the W-2 form.

Makes me wonder if the company sent any into the IRS at all especially if they did not deduct anything. They may have been paying him "under the table." If that's the case, then best let things lie as they are and start fresh because there would be a real mess with the company as well and he wouldn't have a job any longer.

Answer 4

He wouldn't get a W-2 from the construction job - he was working as an independent contractor. He should have gotten a 1099 showing what they paid him, but if not he must use his own records to prepare his return and will owe self-employment taxes (social security and medicare) in addition to income taxes.

He might consult a CPA for help on getting all of this sorted out and corrected.

Good luck.

Answer 5

Your fiancee worked as a contractor. The employer does not deduct any taxes from the check, and will not issue any W2. A contractor has to pay both the employees part and employers part of employment taxes (that is @15.3%).

Your fiancee must start filing now and file for all these years.

He must go though all his records (bank account statements, credit card statements, telephone bills, and so on) and make a list of income and expenses for each year, which is to be reported on Schedule C of form 1040.

Answer 6

You can get your IRS issued W-2s/1099s for the past 5 years in 1-2 business days from Accuverify.com Employers/payers report wage info. to the IRS. Once you have that you will be able to file your federal returns.

Answer 7

dont marry him. at least you know his tax problems. back in the 80's i married someone that didnt file his for 7 years. they found him after our marrage becouse he was a jerk and wanted our entire refund. so i file married but filing separate thing and reported his ssn like it said on the tax form. i got my refund (mailed to my po box) and he got a letter from the irs. he wanted me to fix the problem he had created. so i told him to go to jag (legal attorneys for military people) and have them fix it. i really cant remember what he did. but, i get audited all the time now. mostly for the good, i do make silly mistakes on my own form. even though i have been divorced for 16 years i always wonder what if i hadnt ever married him would i always be under this fine of a hand the irs seems to have for me? so save yourself the hassel. dont marry him and have HIM square away HIS tax problem.

Answer 8

boy some are harsh lol... pepsilime is right on all but left off the fact that if you do marry.. for love and not past mistakes.... you can file an innocent spouse and recover your portion of the refund withheld,.... although better to get these caught up and cleared before marriage... still have alternatives

Answer 9

He was considered an independant contractor. Hope he doesn't get audited, but possible. Worst nightmare imaginable. He needs to get a finacial professional for help on this issue.

Answer 10

How does this affect qualification for Medicare and Social Security