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How can I rectify back taxes?

by Martin G. Laffer, CPA

My wife and I moved to California four years ago. My wife had a business, but she never filed taxes for it. I also haven't filed taxes. My wife died recently, and I cannot find any of her records for her business. I'd like to rectify this situation. What should I do?

Every taxpayer is required to maintain adequate books and records. If you do not have formal books and records, you can construct a set of records from a checkbook or check register. If you are missing checking and deposit records, you can request copies from your bank or credit union. You or a professional tax preparer, such as a CPA, can then construct records sufficient to prepare tax returns.

You state in your question that it was your wife's business but that you, too, failed to file tax returns. If your income was from wages, contact your employers and request duplicate copies of W-2 forms. If you were involved in a partnership, a duplicate Form K-1 should be requested. You may consider contacting the Internal Revenue Service and Franchise Tax Board and request transcripts of all reported income for your and your wife's taxpayer identification numbers.

You likely will have to pay interest on taxes owed and penalties for filing late. Regardless, it is in your best interest not to delay filing back taxes any longer.

Martin G. Laffer, CPA, is a partner in the firm of Laffer & Gottlieb, CPAs. You can reach him at (310) 274-7600(310) 274-7600.

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In accordance with IRS Circular 230, the information on this website is not intended or written to be used, and cannot be used as or considered a "covered opinion" or other written tax advice and should not be relied upon for the purpose of avoiding tax-related penalties under the Internal Revenue Code; promoting, marketing, or recommending to another party any transaction or tax-related matter(s) addressed herein; for IRS audit, tax dispute or other purposes.