If you have been knowingly evading taxes by one means or another, it is time for you to make it right or face the consequences. The good news is that the IRS is presently having a Voluntary Disclosure program aimed at allowing tax dodgers to come forward and declare their assets that have not been taxed. And if you are a Maryland resident, the state is also having a similar amnesty program next month.
If you wish to make good on your taxes, there are two ways to go about doing it. The first is to go under Uncle Sam's Voluntary Disclosure program and declare your untaxed assets. The second is to file back tax returns or amended returns and pay up what you owe. Depending on what form of tax evasion you are committing, you should opt for the appropriate way to pay off your taxes.
If you have not been declaring your assets in an offshore bank account, you should choose to go under the Voluntary Disclosure program. This is because when you voluntarily disclose your assets, you will not face criminal prosecution and the IRS will likely impose a lighter penalty on you. But this Voluntary Disclosure program is not limited to those having offshore accounts only. Many have chosen to voluntarily disclose their assets just to gain official confirmation from the IRS that they are in the clear. The Voluntary Disclosure program ends September 23rd. The IRS says there will not be an extension to the deadline.
If you have been under declaring your assets by reporting less income than you actually earn or by not filing your tax returns for years or by making a mistake in your favor on your returns, then the way to rectify it is to file back tax returns or amended tax returns for each tax year. Tax experts advise submitting each year's return separately to avoid attracting too much attention from the IRS. If your spouse has been incorrectly filling in her tax returns, you can choose to file your returns under 'Married filing separately' to avoid being penalized for your spouse's actions. If you want to correct certain figures previously reported, you should fill up Form 1040X and explain why you need to make your amendment. If you are submitting returns that you failed to submit earlier, you will have to pay back taxes plus interests and penalties. But if you are amending an earlier return, you will have to pay the amended taxes and interests but not likely a penalty.
You can even pay by installments if you cannot pay everything in one lump sum.
Maryland residents who have not paid their taxes last year or earlier are given an amnesty period starting next month. If you pay up, civil penalties and half of interests charged will be waived. You will also not face criminal prosecution unless you are already being investigated. If you cannot afford to pay all at once, the state is willing to receive 10% of your dues upfront and the rest by the end of the year.
Maryland amnesty applications are available online at marylandtaxes.com. Alternatively, call 410-260-7951. The program ends October 30th.
Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.
