As an accounting firm, we often see many of the same questions and concerns from our clients and from people who consider taking advantage of our services. We want to help you understand everything you need to know about us, and what we can do for you. We hope that by providing you the following information, we can help you make a more educated decision about what you would like us to do to help you.


Q: I don’t have enough money to pay my taxes, can I file an extension?

A: The IRS does offer an automatic 6 month extension, however, this is an extension to file the return; not an extension of time to pay the tax.  If you file an extension the law requires you to estimate your tax liability and pay the amount due with the extension.  If the payment is not made you will still be subject to underpayment penalties and interest.


Q: What is my likelihood of getting audited?

A: Over the past several years, the government has increased the number of IRS auditors.  With the higher number of auditors they have increased the number of audits being performed.  For the average taxpayer, the risk of being audited is fairly remote.  As your tax return becomes more complex (ie: you itemize your deductions, you have a business, you receive one or more schedule K-1s) your likelihood of being audited increases.


Q: If my business has no activity, or a loss, do I still have to file a return?

A: If your business is a corporation, an LLC, or a partnership, the IRS requires a return every year.  It does not matter if you were profitable or if you had no activity the return is still required.  For corporations, the penalty for failure to file is fairly substantial and is based on the number of shareholders, not the amount of income, therefore, if you fail to file the return you could end up owing several thousand dollars in penalties.


Q: I failed to file my income taxes several years ago.  Has the statute of limitations run, or can the IRS still require the return?

A: The statue of limitations does not start until the later of the due date of the return or the date it is actually filed.  Therefore, if you do not file the return, the statute of limitations never starts, and consequently it never ends.  In other words, the IRS can require the return be filed.


Q: I have not received a W-2 from one of my employers.  I called the company and they are out of business.  What do I need to do to file my taxes?

A: Employers are required to issue forms W-2 to their employees and also send a copy to the Social Security Administration.  If you never received one, it may have been lost in the mail.  You can try contacting the IRS and request a copy, however, if they were never submitted, the IRS will not have a copy either.  In that case, it is best to file your tax return with the year to date information from the last paycheck stub of the year.  The income is required to be included on your income tax return and you will face penalties for omitting that income.


Q: How long does it take for my refund to be processed?

A: If you electronically file and have your refund direct deposited into your bank account it typically takes from 10 days to two weeks.  If you electronically file but have them mail you a check it will typically take from two to three weeks.  If you mail the return in it will take from six to eight weeks.


Q: My spouse has past due child support.  Will they take my refund to pay his/her child support?

A: If either taxpayer on a jointly filed tax return has past due obligations, (child support, student loans, tax liabilities or any other type of federal or state obligation) your refund will be taken to satisfy those debts.  To avoid this, you may file separately, or you may apply for innocent spouse relief.