I cannot file for offer in compromise because of unfiled returns that are 10 years old or older. Also I cannot file for bankruptcy. I just need an extension for about 2 years till I get my business up and running to show income so I can make a future payment arrangement.
Lawsuit / Dispute Attorney
This area of tax law is among the most complex for individuals and their preparers. Even skilled experts disagree about how to handle it.
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It sounds like it's too late to file for an extension. Call the IRS and tell them you'd like to be placed on "Currently Non-Collectible" status. They're going to make you provide financial information, and the questions they're going to ask are reflected on Form 433-F, linked below. Please prepare answers before making the call.
If approved, they will not try to collect the tax until they receive evidence that suggests an ability to pay - a new tax return, W-2, 1099, etc. When such information is received, you will no longer be considered uncollectible. In the meantime, you should strongly consider filing all the missing returns. Aside from the fact that they're required before filing an Offer in Compromise, filing returns will also start the statute of limitations on collection, limiting the amount of time the IRS has to assess and collect taxes for the missing years. Hire a tax professional to help you recover any records that might be necessary, and if possible, to take care of the call to the IRS. Using a professional will ensure the best possible results.
Robert Hoffman is a tax attorney licensed in California. The information presented here is general in nature and is not intended as a substitute for legal advice. This posting does not create any attorney-client relationship with the author. For competent advice about your particular situation, consult your own attorney.
Agree with my colleagues here - you're likely going to need to get some professional tax help and you're likely going to also need to get all the returns filed. In the mean time - Form 433A and a currently non-collectable designation will help get you the time you're looking for.
Evan A. Nielsen is licensed to practice law in California and handles federal tax matters throughout the U.S. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.
Additional facts are needed to properly navigate this IRS collections issue as there are many pitfalls. While having your account placed on currently non-collectible status would get you the tax relief you would need based on the time frame identified in your question, providing your income information to the IRS at this time may be dangerous. This of course assumes that your financial situation would be probative of a currently non-collectible hardship petition. Because it appears that you need to file outstanding tax returns, it is likely that the IRS may not accept your request to place your account on non-collectible status. Therefore, disclosing your financial information to the IRS without representation or at least a legal strategy may leave you susceptible for levy action.
It is also important to know which tax returns actually need to be filed. While your question indicates that you need to file ten years of tax returns, the IRS generally requires compliance for the six most recent tax years to resolve collection matters, with some exceptions.
Lastly, depending on the stage of your collection case and the collection statute expiration date (statute of limitations), there may be other tax strategies available to get the outcome you desire. Each case is unique. An experienced tax relief attorney such as myself or others found on Avvo.com should be able to review the options with you, often through a free consultation.
This response should not be considered legal advice. No attorney-client relationship is formed by this response, which reflects only the opinion of the author. The response should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question and could change if additional facts were made available.
Your statement implies that you are running a business but are not making any money. Apparently, some of your customers have issued 1099 forms and the IRS has record of them, or, the IRS has prepared tax returns for you based on certain assumption that may not be accurate. The best advice is to file all of your non-filed tax returns, even if you cannot pay the taxes. Unless you address the issue it will not go away and the trouble will continue and make you miserable. You may qualify for an offer-in-compromise. Good luck.