Question by moopoo55: If I have a small home-based business and I have not filed any taxes in 3 years, what are the penalties?
Let’s say that I’ve calculated most of the 2003 year and have concluded that I didn’t owe any taxes for 2003 and 2004 but instead am due a refund.
I’m working to get a good accountant but find that most don’t know about tax shelters, estates, or any of the small business (home based) irs laws.
Please, this is serious. Don’t respond if you don’t have a quality answer for me.
Best answer:
Answer by NotEasilyFooled
The IRS generally does not assess any penalties if you VOLUNTARILY file a late form 1040 tax return AND no tax is due. If you owe tax, however, you can be charged 5% per month.
What do you think? Answer below!
You will not be assessed any interest or penalties for filing late since you are due a refund, and you will not be paid any interest on the refund either.
As to tax shelters, most have to be registered with the IRS. Estates and trusts are a unique animal and are usually only in demand from high income individuals. I find it hard to believe that a CPA would not understand the home-based business rules since that type of enterprise has been popular for many years. You didn’t state what part of the country you are in, and many states (and counties) have funky rules regarding these businesses. You should contact the home office of the company you represent to request referrals of accountants in your area. Good luck