QUESTION

I haven't filed taxes since 1994. I have worked for 12 of those years, but the company didn't take out taxes, what will happen to me when they find ou

Asked on Dec 08th, 2014 on Taxation - California
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Probate Law Attorney serving Los Angeles, CA
Partner at Mitchell A. Port
4 Awards
When the IRS and franchise tax board find out you have paid taxes, you will be subject to all the back taxes and penalties for failure to file tax returns, fail to pay taxes, and for late payment. If your non-compliance involves criminal conduct, then you are at risk for crmininal prosecution.
Answered on Jan 06th, 2015 at 1:54 PM

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If you do not file tax returns with the Interntal Revenue Service (IRS) or California's Franchise Tax Board (FTB), then either agency may prepare the return for you.  This is known as A Substitute For Return (ASFR), Filing Enforcement, or Notice of Proposed Assessment (NPA).   The IRS or FTB will use information they receive from third parties such as a W-2 received from your employee or 1098-int from your mortgage provider to prepare the return.  Typically, the returns prepared by the IRS and FTB result in a higher liability than if the taxpayer had prepared and filed the return.  In your case, since you didn't have taxes withheld from your wages, it is very likely that you would have a tax liablity assessed by the IRS or FTB.   I recommend that taxpayer in your situation have a representative, ie. tax attorney, reach out to the IRS and FTB to determine the status of your tax accounts.  Information received from the IRS and FTB can then be used to prepare the missing returns.  If there is a tax liability, then after submitting the returns you can evaluate an offer in compromise, installment agreement, or other tax resolution strategy. Please let me know if you have any other questions. Adam Brewer Tax Attorney, AB Tax Law APC
Answered on Dec 09th, 2014 at 12:36 PM

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