Legal Question in Tax Law in Illinois

Re: non-filed returns

First of all, it's good that you intend to take care of this problem before it explodes - the IRS is notorious for preparing returns for you ("Substitute For Return") based upon information reported to them on your W2s and 1099s. They then waste little time in filing liens and levies in efforts to collect, and in instances where nonfiling is determined to be a pattern, they refer the matter to the Department of Justice for criminal investigation. Whether or not you have received correspondence from the IRS, you can still take care of the problem without a great deal of trouble.

Although you CAN approach the IRS directly, you would be well-advised to hire legal counsel, as you are likely unaware of the specific provisions of the Internal Revenue Code and you would be at the mercy of the Revenue Agent's instructions, which in many instances is incorrect and could result in substantial overpayment. In addition, because you will be subject to penalties and interest, it is important to have a professional on your side who can argue for abatement of some - if not all - of those amounts. Further, you will have to make a choice between simply filing the returns and paying a "lump sum," going on an installment plan, or submitting an "offer in compromise" which can settle your account for much less than you actually owe. Finally, in the event that you should have received a refund, a professional will be able to assist you in either receiving the refund or applying it toward any outstanding tax obligation.

In your situation, you will probably want to opt for an attorney rather than one of the many "tax resolution services" which are out there. Those services do perform adequately, but they are staffed by "enrolled agents," which is IRS lingo for "person who has filed the right paperwork and has been approved by the IRS." Tax Attorneys, on the other hand, are absolutely permitted by statute to represent you before the IRS, as well as in administrative proceedings, before U.S. Tax Court, and even in U.S. District Court if the case turns into a criminal situation. Attorneys are also bound by the Rules of Professional Conduct, and communication with your attorney is considered to be confidential and privileged, where communication with others may not be.

Our office maintains a nationwide IRS practice, and we would definitely be able to assist you in this matter. If you wish to discuss your tax issue further, please do not hesitate to contact us for a no-obligation, confidential consultation. Thank you, and take care.

Marc D. Daffner, Esq.