Back in 2011, a client came to us with a problem. They had a C Corp that hadn’t filed its income tax returns in the prior 22 years.
That wasn’t a typo. They’d been open for 22 years and had never filed a return.
It’s not like the government didn’t know who they were or where they were located. They had 14 employees, their 941’s were up to date, and they filed a sales tax return every month.
If you were a small and medium sized business accountant like me, you’d see this type of case all the time. The Tax Gap is a real thing in this country, and the story normally goes like this.
Joanne B. Owner worked as a W-2 Employee for 20 years, filed her returns, and received a refund every year. She got downsized, upsized, outsized, whatever, and was laid off.
Two years later her benefits ran out so she started a business. Her first year didn’t go quite as planned. In fact, it was a disaster.
She didn’t have the money to have her taxes done, so she didn’t file. The same thing happened the next two years.
Somewhere around the third year, her file ended up on a Revenue Officer’s Desk at the IRS. The Officer’s job was to see whether or not they should spend time going after her to force her to file the returns.
The Officer looked at the years she did file, realized that she always received a refund, and determined that there was no reason for them to spend resources chasing Joanne down just so they could give her a refund. So the Revenue Officer let it go and didn’t pursue her.
And that’s how it goes. Joanne is now an official portion of the Tax Gap.
In 2022, the IRS estimated the Tax Gap to be $696B in uncollected taxes.
Let me leave you with this…
Clients who come in with this sort of problem don’t know what to do. But something always happens where they need to clean up the mess.
Maybe they’re buying a house and need financing, maybe they’re getting married, or maybe they want to sell the business. Whatever happens to get them to come in is anyone’s guess, but one thing always occurs.
They’re scared to death and shaking right down to their socks. We’ve developed a proprietary method to handle these situations that’s worked so many times, that even I can’t count the real number.
So what happened to my client who hadn’t filed in 22 years?
1 – He’s now in perfect compliance.
2 – Neither the Feds nor the State ever knocked on his door.
3 – He didn’t need to file bankruptcy.
4 – His taxes are paid in full.
5 – He’s now planning on selling the business and retiring to a sunny locale.
In other words, it’s the happiest of all possible endings. And that’s not the only case I can quote like this one. I have dozens.
He goes to work every morning, manages his businesses, turns his profit, and goes home to sleep like a baby because he doesn’t have anything to worry about.
Isn’t that what having the right accountant is all about?
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.SalarySolutions.net
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