I haven’t filed business or personal taxes for almost 10 years and all the records that I need are now gone. It seems hopeless. Can you help?
Yes I can, so be at peace mon amis! I don’t promise that it will be easy, but there is a way, and I can make it as clear as possible.
I suggest starting by gathering as much data as possible—from past tax data (old W2’s, 1099’s, etc.) to the crumpled up receipts in your pants. Get it all in one spot, then organize it all by year, then by month. There’s a lot of information that is available to you from IRS—mortgage interest, wages, etc. Other public documents may be available to you to help you fill-in the holes. Remember, the other side of the transaction might also have records that could help you. Got paid from Uncle Bob for the Summer you worked on his farm? I’ll be he still has the 1099 he sent you back then. The settlement check your lawyer sent you a few years ago for that case he worked on….yep, he should have that file still and be able to copy the information for you.
Next, whatever information is missing, let’s estimate it and document it as best as we can. Maybe you remember paying cash for something. Write it down—date, amount, what you spent the cash on or what you purchased, etc.
It may not be pretty, but there are times when this is the best we can do, and IRS will accept that.
Keep in mind that IRS will take your information and make formal assessments (you’ll be getting a lot of bills…) You can make a plan to pay all this off so don’t worry when the avalanche of mail comes in from IRS.