Roseville + Sacramento Accountant for Small Business Unfiled Tax Returns
Running a successful business is a time-consuming endeavor. You will spend long days and nights determining how to handle business expenses, promote your services, and the best ways to keep your clientele happy. That is why it is understandable that you may forget to file your taxes on time. Whatever reason you may have for failing to file your taxes, you should not wait too long to handle your back taxes. If you need assistance filing back taxes for your business, you should consult with an experienced Roseville unfiled tax return accountant.
The accountants at Cook CPA Group have extensive experience handling unfiled tax returns for small businesses in Roseville, and we are prepared to help you deal with your company’s tax liability.
How to File Your Small Business Back Taxes
For new business owners, managing your tax liability can be a daunting task. There are several regulations that you must be aware of, and you must also keep track of new laws that can affect your tax liability. However, the Internal Revenue Service thoroughly documents whether businesses that should have filed taxes in a certain tax year. That means you should ensure your company stays current on its taxes before the IRS takes action to collect.
The first step to filing the back taxes for your business is to retrieve your transcripts from the IRS. The information you need can vary depending on the type of taxes that you are filing. For example, if you are filing a return to handle employment taxes, you should have all the necessary information for your employees on hand.
Once you have all the information you need, you should determine whether you are subject to certain filing requirements. For example, many times the IRS requires a taxpayer to mail their unfiled tax returns manually. Electronic filing is typically not available when filing back taxes. Additionally, if you have unfiled returns for multiple tax years, the IRS may request that you file for the current year and the previous six years. This timeframe is subject to change depending on your unique situation.
Our accounting firm can help you verify whether your unfiled returns contain accurate information. The IRS will typically place more scrutiny on a back tax return than a return that is filed on time. Any information that is not correct can result in severe tax penalties.
When submitting your unfiled returns, your business may qualify for a penalty abatement. To request an abatement to avoid any penalties associated with filing back taxes, you must include a penalty relief request with your return. If you only have one unfiled return, you have a higher chance of the IRS approving your penalty abatement. If you have more than one unfiled return, this process will require a more intricate approach.
To learn more about filing business back tax returns, you should continue reading and consider speaking with an experienced Sacramento tax accountant.
Penalties for Unfiled Returns
If you do not handle the unfiled returns for your business, there are multiple actions the IRS may take. Filing a substitute return is one option the IRS has for businesses that do not file their taxes. When the IRS files a substitute return, they may not fully utilize the deductions or exemptions that your business was entitled to receive.
Before filing a substitute return, the IRS will provide you with a “notice of deficiency.” This document states that you have 90 days before the IRS conducts a tax assessment. It is in your best interest if you respond to this notice and file your back taxes before the assessment is conducted.
Another option that the IRS may use to collect your tax debt is to file a tax lien. A tax lien is a claim on all the property that the business owns. This option is typically used when a business failed to keep in contact with the IRS regarding their tax debt. If you do not pay the debt or at least reach an agreement with the IRS, the tax lien may lead to a tax levy.
A tax levy is when the IRS repossesses all property that they claimed with a tax lien. To avoid a tax lien or levy, you should ensure you respond to any requests by the IRS. For example, if you cannot afford to pay your tax debt all at once, the IRS may work with you to arrange a suitable payment plan. Under certain circumstances, the IRS may even retract the lien on certain property that the business owns.
Work with Our Sacramento Small Business Tax Accountants to File Your Back Taxes
If your business has unfiled tax returns, you should contact an experienced Sacramento small business tax accountant. At Cook CPA Group, we recognize the challenges that come with managing a new business and we are here to help you alleviate the process. The IRS can impose a variety of penalties on a small business that failed to file their taxes, and we want to help you avoid that outcome.