Unfiled tax return question
A friend has unfiled tax returns - since 2000 or so. They've been poverty line income or so - even was living in a homeless shelter for a time. They know it's notated on their credit report (I don't know exactly what) but they haven't been contacted by the IRS. My friend wants to get things straightened out but they're afraid of what could happen. What kind of reception can they expect if they go to the IRS?
1 Answer from Attorneys
Re: Unfiled tax return question
If you have a duty to file, a factor of total income or, in some cases, types of income or status, the wilful failure to file is a crime. However, the IRS has a voluntary disclosure POLICY that may, in certain circumstances, avoid criminal referral. Note the word policy - it is not immunity nor is it a guarantee. The IRS considers many factors in selecting cases for prosecution such as amount of tax, affirmative acts of misrepresentation, whether the income is from illegal sources, special projects, tax protestors, etc. These are not an exhaustive list.
Since a CPA or accountant has no privilege under federal law, it is advisable to consult with an attorney so that any information divulged during the consultation is protected under the attorney client privilege. Attorneys can hire accountants to assist in preparation of tax computations and the accountants are covered under the attorney work product privilege. These accountants are reffered to as "Kovel" accountants.
Once such an evaluation has been made, then an intelligent decision can be made as to how to proceed.
If you or your friend would like to obtain our assistance, please contact us at the information below.
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