Q:

Subject: need to file back taxes

 

Dear Mr. Kerstetter,

My husband and I have not filed taxes for several years and are being counseled to file the last five years tax returns.

We have lived the entire time in Tulsa, Ok and have participated in numerous home-based (network marketing) businesses during these years. Mostly just breaking even but a couple of good years. I am currently sorting all my receipts and documents by years.  We need someone to prepare our tax returns.  I like your philosophy and wonder

• if you are available for hire,
• what is your rate,
•  are you familiar with clients who want to "get back in the system",
• what steps I am to take to  get our paperwork in order for your prepartion?

Thank you,

A:

You are definitely making the right move in trying to get caught up with your income tax returns.  It sounds as if you might have fallen for one of the very common misconceptions people have; that if they didn't have a net profit in their business, they aren't required to file a tax return. That is dangerously wrong, because if IRS were to check on you, they would assume every penny of gross revenue you received was pure profit if you failed to file a tax return disclosing your operating expenses.

In addition, even if you are overpaid for the past years, IRS has a penalty for procrastinators and will refuse to refund anything for any tax return more than three years delinquent.  However, if you owe money for any year, even five years ago, IRS will demand payment of that tax, along with substantial interest and penalty charges.  It's a double standard that IRS is very fond of.

Working on five years worth of info is a large undertaking.  Since you are obviously familiar with computers, you would be well advised to use QuickBooks to organize your data for the past years, as well as the current and future ones.  Having your data on QB will make it much more efficient for you to submit that data to your tax preparer.  I have tons of info on using QuickBooks on my website.
 
In regard to my being able to prepare your tax returns, I wish I could help; but I already have too many clients to take care of properly; so we are still trimming back on the difficult clients and are not accepting any new ones at this time. 

Unfortunately, we don't have anyone to whom we could refer you. If you haven't already done so, you should check out my tips on how to select the right tax preparer for you.

I wish I could be of more assistance; but I wish you the best of luck.  

Kerry Kerstetter

Follow-Up:

Thanks for your response!

We're awfully close to Arkansas...are you sure you dont know anyone over this way...starts with a _ ends with a _?

=)  An acquaintance recommended Charlie Chung then when we went to find him and found out he had been indicted for tax fraud!! Yikes.

Anyway, sure appreciate the info and the so very helpful website of yours.

 

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 8/19/2006 12:50:00 PM Send this post: