Our client’s need

The client, a restaurant owner and former police officer, came to Baker Tilly with a 24-year history of failing to file his federal and state income tax returns. Despite having built a successful business, the client, due to personal reasons, stopped filing over 20 years prior, and it snowballed from there, causing him a great deal of anxiety. In order to retire, our client needed the peace of mind that would come with “cleaning up” his tax situation. The client, with the help of his attorney, asked the Baker Tilly Tax Advocacy and Controversy Services practice (TACS) for help in rectifying his situation, so he could ultimately become compliant, sell his business, retire and most of all, not be prosecuted for his actions.

Baker Tilly’s solution

Baker Tilly immediately gathered the facts needed and sought written preclearance to enter the Internal Revenue Service’s (IRS) Voluntary Disclosure Program. After obtaining the necessary approval from the IRS, Baker Tilly began the arduous task of reconstructing the client’s business books and records, preparing the necessary disclosure statements and preparing tax returns as required by the IRS and the state Voluntary Disclosure Program. Baker Tilly then submitted the voluntary disclosure packages to the IRS and the state, which included six years of income tax returns, as well as payment of taxes, interest and penalties generated by these six years of returns. The IRS and the state accepted the submissions made by Baker Tilly.

Results

By availing the client to the IRS and state Voluntary Disclosure Programs, the Baker Tilly TACS team was able to resolve a 24-year period of noncompliance by preparing and filing six years of income tax returns. In addition to saving the client hundreds of thousands of dollars in tax, interest and penalties, the Baker Tilly team was also able to give the client ”peace of mind” knowing that, in addition to the savings, he would not be criminally prosecuted for his tax noncompliance.

For more information on this topic or to learn how Baker Tilly specialists can help, contact our team.