[Slinky1000]

A close friend recently confided in me that he hasn't filed any tax returns since 1990. He claims to not have ever been contacted by the IRS, with the exception of last month when the IRS sent a notice asking him to file his 2005 return, apparently triggered by the submission of a 1099 form to the IRS by a client in that year.

He desperately wants to come clean with the IRS and has wanted to do so for a while, but is terrified of taking the first step so has asked for my assistance.

Now, I know enough to know he needs a tax professional for assistance in sorting out this mess. But, what kind of tax professional should he look for? Does he need a Tax Attorney, or are there other professionals that are more appropriate to the task? What would they be called?

How does he find a good one? I don't think he knows (and I certainly don't) know anyone that can provide a personal referral. Is there a professional organization that has member listing by state?

There are many companies online (and I've even seen a TV ad) claiming to be able to fix these types of tax problems and negotiate with the IRS for you. Has anyone used this type of companies? Can they be trusted or is he better off going with a private tax professional? What are the pros/cons of the two? (cost being one of them, I assume).

Is it best to go straight to the IRS first, or contact a tax professional first?

Now, he claims to be able to have enough financial records to be able to complete and submit reasonably accurate tax returns going back a number of years - but certainly not 18 years. I read elsewhere that typically the IRS will only require the past six years (though they could require all 18 years). Is this true that he only needs to worry about the past 6 years of returns, or is this decided on a case by case basis? I don't believe there is really any way for him to submit tax returns from 10+ years ago that have ANY accuracy to them... What is typically done in cases such as these in regards to 10+ old tax returns when no real records exist any longer?

Obviously, with penalties and interest the amount of taxes that will be due simply from the past 6 years (not even considering the previous 12) will be fairly astronomical (not that he's made that much money, some years have been decent, other years scrapers, but even a small amount due will be a lot with penalties and interest). His only asset (aside from a 8 year old vehicle) is an acre and a half of land worth approx $80K (though perhaps less today's market being what it is). As far as he knows, there has been no lien filed on it - once the IRS is contacted will they immediately file a lien on it or do they wait to see if he'll be able to pay whatever amount he ends up owing before going after his assets?

From what I've read elsewhere, as long as he hasn't done anything to hide his income to evade taxes but simply hasn't filed, then the IRS typically isn't interested in pressing criminal charges - simply collecting what they can and then having that person get back on track filing every year. Is there more he should know about insuring this best case scenario and not being charged with anything criminally?

Thanks for reading my long post - any advice you can give is greatly appreciated.

[twinkiedooter]

You should try calling a tax preparer preferably a CPA and ask them to help file the income taxes as far back as they tell you the IRS will legally want for starters. They will probabably have the correct forms to go along with your tax paperwork. Best to start now versus wait until the IRS steps in and hands you a bill for a LOT of money. And no, don't contact the IRS first by any means. Contact the tax professional first, OK? And be sure to join the Ex-Procrastinator's Club also.

[MukatA]

Ask your close friend to file 2005 tax return and all the subsequent tax returns if he/she meets the filing requirement. For self employed/independent contractor income the filing requirement starts with $400.

[AtlantaTaxExpert]

I agree that he needs a tax professional, so I advise that he hire an enrolled agent, who is a tax specialist licensed by the IRS to represent clients before IRS on tax issues. They are MUCH cheaper than a CPA, but they will NOT be inexpensive.

More than likely, the IRS will not go back 18 years, but WILL go back ten years.

Your friend can use the local Yellow Pages to find an enrolled agent.