What to do about Prior Year Tax Returns?
Whether you are looking to file a previous year’s tax return, or amend your return for a particular previous year, hiring a professional CPA can make the process less stressful, especially if filing for multiple years at once.
Is Not Filing My Taxes an Option?
Failing to file a tax return is a serious issue that should be addressed as soon as possible. It is a common occurrence, however, and CPA Accounting and Tax Services has eased the pressure of this situation for many taxpayers. For more details, read our article entitled Non-filed Tax Returns.
Amending Your Tax Return
There are numerous reasons that a taxpayer may wish to amend a previously filed return. One is because after filing for that year, they became aware of significant deductions that were available to them, which they did not take advantage of at the time. Amending such a return could result in a sizable refund to the taxpayer or organization.
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The other main reason for amending a prior year’s tax return is to rectify an error or unwarranted refund. Errors can happen when tax documents, such as receipts and ledgers are disorganized or missing. Bookkeeping services provided by CPA Accounting and Tax Services can help avoid these errors.
Errors, Omissions, and Penalties
Typically, in the event of errors or omissions, penalties are issued by the IRS. How does one avoid paying penalties when they set out to rectify these issues? The individual or organization may be eligible to file a Voluntary Disclosure. This includes a statement regarding the reason(s) for failing to file their taxes or for making errors on a tax return, as well as submitting corrected returns. The IRS has a Voluntary Disclosure Policy that may provide forgiveness or leniency providing that 1) the disclosure is filed in a timely manner (before a third party files a lawsuit or other action against the taxpayer, and before the IRS has begun a criminal investigation) and 2) the disclosure is truthful.
Don’t Delay, Act Today!
Regardless of whether or not you are due a refund or have errors to correct, time is of the essence. Typically, you can only receive a refund for up to three years in the past. Waiting longer than that to re-file and request a refund, can mean little to no chance of recouping those funds. Waiting too long to correct errors or omissions from past years’ returns can mean far worse consequences, such as steep fines and jail time.
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