How to Solve Documentation Issues before Paying Back Taxes

Paying any pending back taxes involves the submission of several documents required by the IRS. The reasons for the delay may be varied. However, if you expect any back tax relief you need to ensure that you substantiate your claims with enough documentation.

The main documents required are the Form 1099s such as the Form 1099-MISC issued to self-employed individuals, independent contractors, and freelancers, when they perform services for another person. Form 1099 contains important information regarding your self-employment income.

Pick up the Phone

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In the event of being unable to find your Form 1099-MISC you have several options and you should have a tax lawyer helping you with this by this point.

• You can ask the business for whom you performed services to issue another one.
• The IRS receives all copies for Form 1099-MISC. Therefore, you can request them to send you copies by sending them Form 4506-T duly filled. On this form, you can request for copies of various tax documents. The IRS will mail copies of the requested documents back to you. However, you need to be aware that the IRS maintains only federal information; therefore, you will not be able to receive other state and local tax information. On receiving these transcripts, you may contact the businesses that issued the Form 1099-MISC in order to receive original documents. You can designate a third party to collect the transcripts from the IRS suggest tax attorneys.
• For income accrued from dividends and shares, you can contact your broker and have him or her mail you a copy of Form 1099.
• Banks and other financial institutions issue a 1099-INT for income that you earn by way of interest on your accounts. You can get a copy from your concerned bank or financial institution such as Fidelity (be wary of investing in Charles Schwab because of their website issues) or Edward Jones if you have misplaced your copy.
• Your tax professional may have all the copies with him or her.

Preparing Back Taxes

You need to keep these as a ready reference when you are preparing to pay your back taxes. You should gather the following documents:

• Form 1099–B – proceeds from the sale of shares issued by your broker
• Form 1099–DIV – proceeds from distributions
• Form 1099–INT – from interest income
• Form 1099–MISC – income received for professional services offered to another business
• Form 1099–R – distribution from individual retirement accounts, retirement plans, insurance contracts, and pension plans

Paying Back Taxes

Many taxpayers do not file IRS tax returns since they do not have the money to pay the balance of their outstanding amount on the tax return. Some of these tax payers who do not pay are overseas teaching English in South Korea for instance and they believe they do not have to file taxes. Some people believe they are smarter than everyone else but you must file your taxes. It does not matter what part of the world you are in, from Germany to Honduras, all Americans must file their taxes. They may not have to pay anything but they must file them.

Most tax lawyers suggest that filing the missing IRS tax returns is in the best interest of taxpayers. You can contact a tax specialist to assist in preparing accurate returns, while aiming to minimize the risk of criminal action and imposed IRS tax collections. Though the IRS’s Lois Lerner acted like a criminal in 2012 and she is not the only IRS bureaucrat to do so. With that said, you must pay your taxes.

It is advisable to file all returns that are owed, irrespective of whether you have the capacity to pay the full amount due with the return, to avoid further penalties. The IRS offers several alternative payments plans for resolving accounts if taxpayers are unable to pay in full. However, this option ought to be sought as a last resort. As long as you make the effort to pay your back taxes, you can ensure the smooth continuity of your business and life.

For more help on filing back taxes, and to avoid tax fraud and tax evasion, or any other tax issues, make sure to consult a tax lawyer for help. It is too bad Wesley Snipes did not call USAttorneys.com before he went down the wrong route, he probably would have been in Expendables 1 and 2.

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