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Thread: And yet another Tax question....

  1. #1
    Veteran Member ToriBaltimore's Avatar
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    Default And yet another Tax question....

    I have been dancing for 5 yrs. (basically...off and on...my off time I didnt work) I have never done my taxes (including 2005 that would be 6 years to catch up on) I dont know where to begin. I dont know what to do about the past years because I have no idea what I made.
    I called an accountant today and he said he was suprised that I wasnt in jail . Thats great. SO I wondered if anyone else had any suggestions. Has anyone allowed themselves to get in this situation ...and then found a way to get out of this situation.
    Also , over the years I have moved a lot and worked in a number of clubs (to make it all the more complicating).
    And does anyone know any good accountant in the philadelphia area that they trust or use that they would recommend?


  2. #2
    Member k8t's Avatar
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    Default Re: And yet another Tax question....

    I would ask the other girls you work with who they use. Accountants can come up with all sorts of neat tricks to get you out of paying a lot at the end of the year..because you are an independant contractor, you can write off almost all your expenses. I definately pays to get an accountant. Good luck!

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    Banned Melonie's Avatar
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    Default Re: And yet another Tax question....

    Tori, I've never heard of anybody NOT filing income taxes for 6 years running, and then attempting to file retroactively. I have absolutely no idea in regard to where to even start.

    In terms of purely personal speculation, the two major reasons that the IRS hasn't caught up with you were probably #1 the fact that you were constantly on the move and never lived at the same address for more than one year, and #2 the assumption that you have never bought an expensive car or house, that you have never had a sizeable bank / investment / retirement account etc. which would have generated an automatic transaction or automatic earnings report to the IRS.

    Not meaning to make you worry even more, but the IRS usually follows a 3 year statute of limitations regarding going back on tax returns. However, if you never filed a tax return at all, the statute of limitations 'clock' never started running ... meaning that if you DO draw IRS attention they can go back on you for unpaid taxes for all six years during which you didn't file. Also, even assuming that you didn't earn much and perhaps owe an average of $10,000 per year in unpaid taxes, if you add on six years worth of interest and penalties the IRS may attempt to hit you up for more than 100 grand ! This would clearly put you into 'settlement' territory. You could potentially get a specialist involved like , but they usually deal with clients that the IRS has already latched onto.
    Last edited by Melonie; 10-19-2005 at 02:45 PM.

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    Veteran Member ToriBaltimore's Avatar
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    Default Re: And yet another Tax question....

    I have done taxes before, however..I was in highschool then and my parents did them (lot of good that helps me now I guess but anyhow, I do make payments on my car but I do not own a home. I guess my best bet is to just leave it to an accountant.

    I have been told various things like because I was so young and had nothing in my name at the time is why the IRS hadnt caught up to me yet. I do have a bank account but never anything over a couple thousand in it.

    What a mess huh?

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    Banned Melonie's Avatar
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    Default Re: And yet another Tax question....

    I'd maybe try the free consultation available at just to find out what they think of your situation.

    If your car was worth more than 10 grand when you bought it, and you have a car loan with a major financial institution, it's a miracle that you haven't heard from the IRS already.

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    God/dess Emily's Avatar
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    Default Re: And yet another Tax question....

    it is a mess

    are you prepared to pay all your back taxes plus penalties and interest? You could theoretically keep running, but you will never be able to own investments....which means you can never retire or own a home. It's a choice between shitty and shittier, but you could have seen this coming. There is no free lunch!

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    God/dess montythegeek's Avatar
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    Default Re: And yet another Tax question....

    Tori,

    I would have no idea where to get started. You need to get into the system ASAP. The back taxes will be bad enough, but the last thing you want is a really big involuntary calculation done by the IRS. You need a really good accountant SOON, and maybe a lawyer. I hope Dan sees this and comes up with some first hand insight.

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    God/dess Zofia's Avatar
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    Default Re: And yet another Tax question....

    Hire an accountant who is an IRS Enrolled Agent. They deal with the service all the time. They go to their seminars. They know the local IRS office very well. You'll have to file a bunch of returns. However, there is no penalty for years in which you don't owe taxes. An enrolled agent will be able to handle that for you too. Good luck.

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    Senior Member DanMorris95156's Avatar
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    Default Re: And yet another Tax question....

    Hi,

    Here is a quick summary of what I beleive your situation is;

    1) The IRS isn't chacing you (what about Philly City tax?) because they haven't had the chance to match your records they receive with a filing. And....if their information suggests say less then the required minimum amount of income to file a tax return (say $5k of interest/dividends) then they may never bug you.

    2) The IRS has just finished a major reorganization where liek 30,000 IRS employees have been busy for 5 years moving/changing how they are doing business, now these employees are "free" to look for tax holes like yours.

    3) There is no statute of limitations for an unfiled return. Lesson = start filing

    4) I have helped file returns upto about 15 years delinquent - there is work there and is more labor intensive becasue I had to do about 5 years by hand as my software only goes back to about 1992 - but that is irrelevant.

    5) You should initiate filing ASAP - file 2004 first and then within about 90 days be able to file for all open years. Use estimates where necessary and be ready to defend your numbers but I have found that voluntary reporting is fairly easy. The IRS wants people in the system and moving forward

    6) Payment plans are available if you can't pay or offers in compromise if really bad - cross that bridge after filing

    7) I don't have any direct colleagues in Philly - but I have experience working with tax customers there and certainly would avail myself/firm to assistance as distance isn't really an issue.

    Start a record keeping system now to track your income and expenses - again can help here.

    9) Your biggest tax exposure is self-employment taxes - but like I think Melonie said, you have deductions available to work with - and a good accountant can help you remember your business expenses.


    You may contact me with questions or further guidence.


    Regards,

    Dan Morris
    [email protected]
    www.adultfinacialservices.com
    Daniel D. Morris, CPA
    [email protected]

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    Veteran Member ToriBaltimore's Avatar
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    Default Re: And yet another Tax question....

    I just wanted to say thank you to everyone for your input. I finally got this mess cleaned up and really it wasnt that tragic.


    Quote Originally Posted by Emily
    it is a mess

    are you prepared to pay all your back taxes plus penalties and interest? You could theoretically keep running, but you will never be able to own investments....which means you can never retire or own a home. It's a choice between shitty and shittier, but you could have seen this coming. There is no free lunch!
    and not trying to start anything but I was simply asking for advise because I managed to find myself in a sticky situation, I realize that this is "no free lunch" ....which is why I began this post to begin with . I wasnt asking for snide remarks, I was asking for help.

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    Banned Melonie's Avatar
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    Default Re: And yet another Tax question....

    that's great news Tori. Nobody likes having to fork over large amounts of money to pay income taxes. But on the other hand, it's better to do so voluntarily as opposed to being hounded by the IRS - not to mention the frozen bank accounts, the seized assets, and all of the other 'wonderful' things the IRS is capable of !

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    Featured Member Lizette's Avatar
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    Default Re: And yet another Tax question....

    Quote Originally Posted by ToriBaltimore
    I just wanted to say thank you to everyone for your input. I finally got this mess cleaned up and really it wasnt that tragic.
    Fantastic! If you do not mind sharing, what did you do to get everything in order?

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    Veteran Member ToriBaltimore's Avatar
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    Default Re: And yet another Tax question....

    I just called an accountant that came highly recommended from a girl at work. He was awesome, he worked for the IRS for 15 years so I left everything pretty trusting in his hands. I gave him all my bank statements and monthly expenses ...he did all the work. I ended up oweing quite a bit, but not at all as much as I thought I was going to owe. I didnt realize the rediculious amount of write offs you get. Anyhow, so without to much stress it all worked out well.

    Again, thanks so much everyone for the input

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    God/dess Bunny's Avatar
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    Default Re: And yet another Tax question....

    I'm glad it worked out for you. Owing the IRS money is scary. I'm hoping I can pay all my taxes on time this year.

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