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Finding ways to show that a tax return was filed

On Behalf of | Nov 9, 2016 | IRS Issues

As Georgia taxpayers may know, problems may sometimes occur when a tax return is filed. In some cases, the Internal Revenue Service may not have any record of that filing. Knowing how to prove that a return was filed may be important to avoid paying the penalties.

About 30 years ago, an incident occurred at the IRS office in Philadelphia where overloaded employees hid and destroyed tax returns because of an overload of paperwork. In addition, other IRS offices reportedly have had problems due to destroyed or hidden correspondence or returns.

Proving that a tax return was filed may be more complex than just testifying before a judge in court. One way to prove that the paperwork was filed is through the use of a state tax return. Because taxpayers in some states are required to attach the federal return when filing the state return, being able to prove that the state return was filed lends credence to the fact that the federal return was filed as well.

In one case, a taxpayer had failed to file returns for a number of years. The individual did not have the money to pay her tax debt in 2002. In succeeding years, the amount owed, plus penalties, became higher and higher. Finally, the woman filed the federal returns a number of years later, but one was lost by IRS. Through using a document entailing an installment agreement in 2010 and a 2007 tax filing, which IRS claimed was lost and then found, the woman proved her case.

When faced with penalties by the IRS due to failure to file returns or pay the owed amount, an individual might benefit from consulting with an attorney experienced in tax issues. An attorney may assist by helping to negotiate with the IRS for a reduction of penalties or an offer in compromise.