Get Current and Stay Current With the IRS

Filing season may be over, but the IRS process is not finished.

A return enters processing. Payments are posted. Balances are billed. Income documents are matched. Notices are generated. If the taxpayer owes, the account moves into the next phase. That phase is not only about what happened last year.

It is also about what the taxpayer does next.

Getting current means bringing the IRS account into compliance.

Staying current means preventing the same problem from forming again.

Both matter.

A taxpayer who files old returns but keeps creating new balances has not solved the IRS problem. The taxpayer has only moved the problem forward.

Now that your return has been filed, the next set of decisions begins. Before IRS processing or planning opportunities are missed, speak with Steve Perry, EA about your situation. Call 678-717-9818, email [email protected], or connect on LinkedIn at www.linkedin.com/in/steveperrybtm.

Getting Current Starts With Knowing the Account

Many taxpayers try to resolve IRS debt without first knowing what the IRS account shows.

That is backward.

The IRS works from its records. Those records show filed returns, missing returns, assessments, payments, credits, penalties, interest, notices and collection activity. Before a taxpayer can make a plan, the account must be understood.

Getting current starts with identifying:

• Which returns have been filed
• Which returns are missing
• Which balances are assessed
• Which years have Substitute for Return activity
• Which payments and credits posted
• Which notices have been issued
• Which collection deadlines are active
• Whether the current year is creating another balance

Without this review, the taxpayer is guessing.

The IRS does not guess.

The IRS acts from its account records.

Filed Returns Are the Foundation

Required returns must be filed before most IRS resolution options become available.

The IRS wants a complete account.

It wants to know the correct balance.

It wants to know whether the taxpayer is participating in the system.

It wants to know whether additional liabilities are still hidden behind missing returns.

That means the taxpayer needs to address missing filings first.

This does not mean filing every old year blindly. It means determining which years are required, which years correct an IRS assessment and which years affect the resolution strategy.

A taxpayer who files required returns creates a starting point.

A taxpayer who stays silent allows the IRS to move with the information it already has.

That information favors assessment and collection unless the taxpayer supplies the correct facts.

Substitute for Return Issues Must Be Corrected

When a taxpayer does not file, the IRS can create a Substitute for Return.

That is not the taxpayer’s best return.

It is the IRS using available income records to build an assessment. The IRS does not search for business expenses, basis, dependents, credits, or the most favorable lawful filing position.

An SFR can overstate the balance.

Before the taxpayer agrees to pay, the right return must be prepared and compared against the IRS account.

The correct return can include:

• Business expenses
• Cost of goods sold
• Stock basis
• Rental expenses
• Depreciation
• Filing status
• Dependents
• Credits
• Withholding
• Estimated payments
• Carryovers

Getting current means replacing incomplete IRS calculations with complete taxpayer filings where appropriate.

Current Year Compliance Cannot Wait

Many taxpayers focus on old years and ignore the year they are living in now.

The IRS does not.

A taxpayer who owes for prior years and is underwithheld this year is creating the next balance. A self employed taxpayer who owes old tax and is not making estimated payments is repeating the same problem. A business taxpayer with payroll tax debt and missed current deposits is continuing the pattern that triggers aggressive IRS attention.

Current year compliance means:

• Wage withholding is corrected
• Estimated tax payments are being made when required
• Business payroll deposits are current
• Bookkeeping is current
• New income sources are being tracked
• IRS notices are being answered
• The next tax return will not create another balance

Getting current without staying current is temporary.

The IRS sees that.

If you are unsure what happens next after filing or whether your return could trigger IRS correspondence, speak with Steve Perry, EA to review your position. Call 678-717-9818, email [email protected], or connect on LinkedIn at www.linkedin.com/in/steveperrybtm.

Staying Current Protects Resolution Options

IRS resolution options depend on compliance.

Installment agreements require current filing and payment behavior. Offers in Compromise require filed returns and current tax obligations. Appeals are stronger when the taxpayer brings a complete record and a workable proposal. Penalty relief is more persuasive when the taxpayer can show the problem was corrected.

Currently not collectible status is different because financial hardship can justify suspending collection before full return compliance is completed. Missing returns still must be addressed, but CNC can protect a taxpayer who cannot pay without hardship.

The broader rule remains clear.

Staying current protects the taxpayer’s ability to request relief.

Ignoring current compliance weakens the taxpayer’s position.

A Payment Plan Does Not Fix Future Noncompliance

A payment plan addresses an old balance.

It does not fix withholding.

It does not make estimated payments.

It does not keep payroll deposits current.

It does not prevent the next return from creating another balance.

This is why many IRS payment plans fail.

The taxpayer agrees to pay the old debt but does nothing about the current year. The next return produces another balance. The IRS sees a new liability. The agreement can default.

The problem was never only the old balance.

The problem was the system that created the old balance.

A real resolution plan addresses both.

Businesses Need a Different Level of Discipline

Business taxpayers face higher compliance pressure.

Payroll deposits, income tax deposits, bookkeeping, contractor reporting, sales records and entity filings create more moving parts. When a business falls behind, the IRS views current deposits as critical.

A business that asks for relief on old tax while missing current deposits is not stable.

The IRS sees continuing exposure.

Business compliance requires:

• Current payroll deposits
• Accurate payroll tax filings
• Clean bookkeeping
• Proper contractor reporting
• Sales and income tracking
• Owner draws and distributions tracked correctly
• Estimated tax planning for owners
• Current financial statements

A business cannot resolve IRS problems while the books remain unclear and current obligations are ignored.

Post Filing Season Is the Best Time to Correct the Pattern

After filing season, the numbers are fresh.

The taxpayer knows whether a balance was created.

The IRS account has not yet completed every processing and collection step.

There is still time to correct the current year before the same result repeats.

This is when taxpayers should ask:

• Why did I owe?
• Were wages underwithheld?
• Were estimated payments missed?
• Did business income increase?
• Were retirement distributions taken without withholding?
• Are old returns still missing?
• Is an SFR balance on the account?
• Are notices being ignored?
• Is a formal IRS resolution strategy needed?

Waiting until the next filing season leaves the taxpayer with fewer choices.

Post filing season is not the end.

It is the planning window.

Before assuming your tax situation is complete for the year, consider having Steve Perry, EA evaluate your next steps and planning opportunities. Call 678-717-9818, email [email protected], or connect on LinkedIn at www.linkedin.com/in/steveperrybtm.

IRS Notices Are Part of Staying Current

Staying current also means responding to IRS correspondence.

Notices are not background noise.

They are part of the IRS process.

A notice can address:

• Balance due activity
• Missing returns
• Proposed adjustments
• Income matching issues
• SFR activity
• Penalties
• Collection intent
• Levy rights
• Appeal rights
• Payment deadlines

Ignoring notices gives the IRS the next move.

Responding keeps the taxpayer in the process.

A taxpayer who opens notices, understands deadlines and responds through the right channel maintains more control than a taxpayer who waits until the IRS escalates.

Getting Current Is Not the Same for Every Taxpayer

Every taxpayer’s path is different.

A wage earner with one balance due year needs a different plan than a self employed taxpayer with three missing returns. A business with payroll tax issues needs a different plan than a retiree with an SFR assessment. A taxpayer with health problems and no ability to pay needs a different plan than a taxpayer who can handle a structured installment agreement.

The IRS account determines the starting point.

The taxpayer’s financial facts determine the strategy.

The current year determines whether the strategy can last.

That is why IRS resolution is not just choosing a form.

It is building a complete compliance and collection plan.

Common Mistakes After Filing Season

Taxpayers often make the same mistakes after filing season.

They include:

• Filing the return and ignoring the balance
• Waiting for the IRS to propose a solution
• Failing to adjust withholding
• Missing estimated tax payments
• Ignoring missing prior year returns
• Accepting an SFR balance without review
• Entering a payment plan before correcting the current year
• Ignoring IRS notices
• Letting business deposits fall behind
• Treating IRS resolution as a one time event

These mistakes create leverage for the IRS and reduce options for the taxpayer.

The Better Approach

The better approach is structured.

First, review IRS transcripts.

Second, identify missing returns.

Third, correct SFR assessments when needed.

Fourth, determine the correct balance.

Fifth, correct withholding or estimated payments.

Sixth, bring business deposits current.

Seventh, organize financial records.

Eighth, respond to IRS notices.

Ninth, choose the resolution option that fits the taxpayer’s ability to pay.

Tenth, monitor the current year so the problem does not repeat.

That is how a taxpayer moves from reacting to the IRS to managing the account.

Final Thought

Getting current means bringing the IRS account into compliance.

Staying current means preventing the next balance from forming.

Both are required for a durable IRS resolution strategy. Filing old returns without correcting the current year leaves the taxpayer exposed. Setting up a payment plan without fixing withholding or estimated payments creates default risk. Ignoring notices gives the IRS control of the next step.

Filing season may be over, but IRS processing, matching, billing and enforcement sequencing continue after submission. Many IRS problems arise not because a return was filed, but because nothing was done after the return entered the system.

After filing season ends, many taxpayers miss critical planning windows that affect next year’s outcome. If you want to stay ahead of the process, speak with Steve Perry, EA now. Call 678-717-9818, email [email protected], or connect on LinkedIn at www.linkedin.com/in/steveperrybtm.

FAQ

What does it mean to get current with the IRS?

Getting current means required returns are filed, assessed balances are understood, SFR issues are corrected when appropriate and the account is ready for a proper resolution strategy.

What does it mean to stay current with the IRS?

Staying current means the taxpayer is not creating new balances. Withholding, estimated payments, payroll deposits, bookkeeping and notice responses are being handled now.

Can I resolve old tax debt while creating a new balance?

That weakens the case. Most IRS resolution options depend on current compliance. A new balance can prevent approval or default an existing agreement.

Why does the IRS care about current year compliance?

The IRS does not want to resolve one year while the taxpayer creates another liability. Current compliance shows that the problem is being corrected.

What should I do after filing a return with a balance due?

Review why the balance occurred, correct withholding or estimated payments, check for missing returns, respond to IRS notices and choose a resolution strategy based on the correct account balance.