Have unfiled IRS returns? 8 Tips for Your Tax Records

Getting Back on Track with Unfiled IRS Returns

Somewhere around 5 million Americans have unfiled IRS tax returns.   If you are self-employed or own a small business, then here are some tips to consider in terms of getting your income and expense records together.   It can be difficult for some taxpayers because they may have moved and their financial records might be lost or destroyed.

How Many Years of Returns Do You File?

If you are overwhelmed with the process of filing so many returns, please take note of IRS Policy 5-133, which states that the IRS will essentially be requiring taxpayers to only file the last 6 years of unfiled returns.  There are sometimes be exceptions to this policy, for example, if an IRS Revenue Officer specifically instructs a taxpayer to file additional returns, or sometimes a business might be required to file additional unfiled returns.   But in general, the IRS will follow Policy 5-133.

Ideally, you will have receipts, but check these unexpected sources you can use to confirm certain expenses and costs.

  1. Check your own social media posts. Perhaps you shared a link or business update that indicates a certain project or show;
  2. Want to claim a vehicle but forget certain details? Contact your auto insurer to get make, model, and year of your car;
  3. Did you keep a calendar? It can be either a physical or digital calendar.  Once you have vehicle information, you can use dates and locations of travel to reconstruct some of your business mileage for each year;
  4. If you are more confident with dates and locations than anything specific, ask your tax preparer about “Per Diem” expense reporting;
  5. Check your photos on your phone and computer, the dates associated with them is another way to piece together events, travel, and projects;
  6. Search keywords on your email address to pull up certain communications or online purchase receipts;
  7. Check your computer for saved files for invoices. Don’t be shy about contacting old clients for verification they received your invoice.   One strategy is to conduct a customer service survey and ask if they received invoice or bill in a timely manner and if they are satisfied with the quality of work;
  8. Former employees may have information on their computers or deep in their email addresses as well.

Sometimes record re-creation can feel like detective work.  But it is the best kind of investigation because, ultimately, verifying your expenses and income is the best way to reduce your tax liability. After this undertaking is completed, be sure to ask your tax preparer about how you can more seamlessly keep your records for the future.

My office works extensively with businesses and self-employed people looking to get back on track with the IRS.  Call me to discuss your case at 412-920-6565.

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