Way back in February of 2020, the IRS issued IR 2020-34, which announced their plans to hunt high-income non-filers and bring them into compliance.
Then the pandemic happened. Everything paused.
Guess what? The IRS is on the hunt again, looking to simply enforce the laws already on the books. They are using everything from whistleblower reports, analytics, even tips from neighbors to enforce compliance on high-income non-filers.
High-Income Non-Filers: Respond or Pay the Price
Before we go any further, we should define what we mean by ‘high-income non-filers’ – those making over $100,000/year and not filing taxes.
Now, as the IRS does, initial contact about being a high-income non-filer most likely came by mail. Failure to respond to these initial requests comes at a price – life-changing repercussions. We are not just talking about penalties (which would be significant). We are talking about possible criminal investigation (tax evasion is a crime) and even jail time. PRISON! Spending the rest of one’s life as a convicted felon.
The 1099 Ratted You Out
You’re a business owner. Aside from cash, you take debit and credit cards, using a company like Square or another merchant services provider. All those credit and debit card transactions are recorded and added up on Form 1099-K, which is conveniently filed with the IRS.
That Form 1099 is just a gross figure – expenses are not taken into account. The IRS goes off the information they have. And if you haven’t been filing tax returns, the IRS only has part of the picture – that 1099 income form. It says you made $100,000 in card sales, IRS says you owe taxes on $100,000. You are now a high-income non-filer.
Voluntary Disclosure Program
The IRS revenue officer that pays you a visit is not coming to take you away in handcuffs (yet). There is an out – plead guilty. The IRS calls it the Voluntary Disclosure Program. Taxpayers have to be willing to admit that they “willfully failed to comply” with tax filing (and payment) obligations. Those willing to do so may be able to resolve their noncompliance and minimize the consequences.
Be forewarned – the examination process is extremely detailed and painfully lengthy. You definitely do not want to face it alone.
One Last Thing
Giving yourself a fighting chance against the IRS starts with representation. It starts with Strategic Tax Resolution. We are the ‘guy on your side’ – trusted tax resolution experts with local offices and online-assisted means to better serve you. Strategic Tax Resolution handles the IRS and State taxing authorities on your behalf, working to negotiate the best possible outcome for you. Don’t wait until it is too late! Call Strategic Tax Resolution today at 888-339-4914 and Get Relief!