Serious problem... need help!

[Shadow8]

My girlfriend is in need of MAJOR help... she hasn't filed her taxes for at least 5 yrs! Her problem stemmed from the time she worked "under the table" for about a year or so. As she was a young adult who didn't know any better, she didn't know what to do when filing taxes, and as a result, didn't file them and hasn't since. She has long left that job and has since been "legit": jobs where employers witheld taxes and where she receives W2s. She is sure that she is entitled to returns but didn't claim them as she hopes it will be used as "insurance" to offset any taxes she may still owe. What can she do now to straighten her mess out? Its obvious that her innocent negligence has compounded to a serious problem. She is sick and tired of fearing that Mr. Taxman is going to one day haul her off to jail for failing to file. She wants to get this serious problem settled and get on with her life. We don't know where to begin to resolve this problem. Does anyone out there have any suggestions on what to expect and what can be done (other than the obvious of getting a lawyer)? Thanks in advance.

 

[crager34]

Read the law (IRS Code Chapter 26) and see if it even applies to you. As much as you want to be law-abiding Citizen's, read the and learn the law that you are supposed to abide by.

 

[loku]

If the tax withheld during the years she had withholding were as much or more than the tax, then although she should have filed for those years, the penalty for the year would be only $100. If she owed tax for the year, the IRS might assess a penalty. The penalty would be the greater of 100% of the tax owed or $100. The IRS charges interest on amounts due, including the penalties, so if she files for those years, her exposure is slight. If the IRS has no record in their files of any income she had and did not report for the other years, they very likely will not even look into those years.

No matter what else she decides, she should file her return for this year. If she does and that somehow prompts the IRS to look into back years, they usually look into the 3 prior years, and she might even end up with a refund for those years.

However, if she wants to minimize her exposure, she should hire a tax attorney. The fact that what they discuss is confidential is very important in these matters, and the attorney is a professional in handling such cases.

 

[crager34]

Define "should" Must - Require - Have too

The law is very clear. IF she is liable, then yes, she "should." But, and she has (so do you loku) a 90% chance of NOT being liable to pay, she would not be "required" to pay.

Your a learned person loku (obvious from your post), but show the law that you talk about.