Plano Back Taxes and Late Filing

Fixing Past Problems

Plano taxpayers usually are not behind because they ignored their taxes. More often, they missed a form they did not know about, such as an FBAR for a bank account in India, or a part-year state return after a move, or overpaid because of an RSU basis error. BOMCAS helps Plano clients correct these problems remotely.

Texas penalties and disclosure appear on Texas back taxes and late filing. Here we cover Plano's most common corrections.

Missed FBARs and Foreign Income

Residents who did not report foreign accounts on FBAR or Form 8938, or left foreign interest off their returns, can face large penalties. If the failure was not wilful, the streamlined filing compliance procedures allow three years of amended returns and six years of FBARs with a 5 percent penalty on foreign assets for U.S. residents. Those who reported all income but missed FBARs may use the delinquent FBAR procedures with no penalty in many cases.

RSU and Stock Errors

Many people pay tax twice on stock compensation because the cost basis on Form 1099-B was wrong. Amended returns can claim refunds for up to three years after filing. Others never reported sales of ESPP shares correctly. We review brokerage records and correct past returns.

State Returns After a Move

People who moved from another state sometimes never filed a final part-year return there, or did not report stock income that the old state could still tax. The old state may send notices years later. Filing the missing returns and documenting the move usually resolves the matter.

Unfiled Federal Returns

When returns have not been filed, the IRS may file a substitute return that ignores deductions. Filing original returns usually lowers the balance. Penalty relief such as first-time abatement may be available.

Franchise Tax and Business Filings

Companies that miss franchise tax reports face penalties and forfeiture. Consultancies that operated in other states without filing there may also owe those states. We file missing reports and request reinstatement or voluntary disclosure in other states.

Payroll in Other States

Employers that did not register for withholding in states where remote employees work can owe the tax they should have withheld. Many states offer voluntary disclosure to limit penalties. We register and file missing returns.

Foreign Mutual Funds Never Reported

Many Plano residents hold Indian or other foreign mutual funds without realising they are PFICs. Sales and distributions may have been reported as ordinary capital gains, or not at all. Correcting this may require Form 8621 for several years, calculations under the default excess distribution rules and, where suitable, the streamlined procedures. We work out the exposure before deciding how to proceed.

Foreign Property Sales

Sales of a flat or land abroad must be reported on the U.S. return, with a credit for foreign tax paid. Residents who sold property overseas and did not report it can file amended returns, which often show little additional U.S. tax once the foreign tax credit is applied.

ESPP Sales

Sales of shares bought through an employee stock purchase plan that did not meet the holding periods create ordinary income for the discount, which is not always shown on the W-2. Others reported the full gain as capital gain. We review plan statements and amend where needed.

Our Process

Request IRS transcripts and state records.
Gather brokerage and foreign records.
File missing returns and forms.
Use streamlined or disclosure programmes where suitable.
Set up payment plans if needed.