My clients in Los Angeles County, Ventura County, Santa Barbara County and Orange County who are “taxpayers” present tax problems in two flavors: those who don’t pay their tax and those who don’t file their tax returns. Some tax problems involve both non-filers and non-payment.
As a California tax attorney involved with tax controversies, I have a checklist when helping the client who is a non-filer:
Create a workable plan to deal with all aspects of the client’s non-filing.
Instruct the client to obtain all tax-filing information.
Determine if Automated Substitute for Return (ASFR) assessments have been made or attempted by IRS.
Retain the services of a competent accountant to prepare necessary returns.
Obtain copies of last-filed tax returns.
Advise the client to consider filing status decisions in the preparation of tax returns.
Have the client prepare drafts of 433-A/B Financial Disclosure Forms.
Review with client collection alternatives: installment agreements, currently uncollectable status.
Consult with the Revenue Officer if the taxpayer’s delinquent account has been assigned to one.
Contact the IRS, if necessary, to obtain unreported income documents or request tax transcript.
Respond appropriately to all IRS correspondence requesting delinquent filed tax returns.
Prepare Form 843 for filing incident to Penalty Appeal Procedure, if necessary.
Review with client approximate likely penalty assessments.
Prepare factual grounds for reasonable cause waiver.
Review new procedures for filing of offers in compromise.
Refer client to bankruptcy attorney, if appropriate and taxes appear dischargeable.
Insure that the client remains current in order to qualify for collection alternatives. This includes making estimated tax payments and tax deposits as required by law and filing all extension requests and current returns. (Note: Under current offer in compromise procedures, a client who is not current will not have his offer returned as “non-processable” but will be contacted and given the opportunity to correct the situation, if possible.)
If you face the tax problem of having unfiled returns or unpaid federal or California State taxes, call Mitchell A. Port at (310) 559-5259 for tax help.