What is IRS Letter 1085 and Why Did I Get It?

The IRS has prepared an unfiled tax return on behalf of the business and proposed taxes due.

You received this letter for one of three reasons;

You did not file a tax return for a tax period in which the IRS believes you have a filing requirement.
The IRS determined a return should be filed and based on information in their system, prepared a return.
The IRS sends Letter 1085 to notify you they have prepared a tax return on behalf of your business for the tax period on the notice. You have the option to agree to the return as prepared by the IRS, to file an original return or to contact the IRS with additional information.

You have four options to address the letter

File an original return in dispute
Contact the IRS to resolve an error
Dispute the penalties
Make arrangements to pay

The major problem businesses face is that the amount of penalties & interest charged by the IRS are so enormous, they force the closing of the business. If unable to pay, this may be a viable strategy. If this happens, the IRS will likely seek the “Trust Fund Recovery Penalty” against ALL “Responsible Parties”. If so, EACH “Responsible Party” will have to make arrangement for personal resolution. But, if the circumstances are good, an Offer in Compromise may be recommended.

What is my first step?

If you received a letter or notice, a decision has to be made. Do you feel confident to handle this situation on your own? If it is a simple issue and you already know the answer, call or write them. If the issue is more complicated, you need to hire a Certified Tax Resolution Specialist. The IRS or State will take full advantage of your lack of knowledge and experience.

What is Your Next Step?

The next step is to determine if the notice was sent in error. Do you have an outstanding tax liability? Do you have unfiled or incomplete returns?

Is There a Time Limit?

Yes, each letter or notice from the IRS or State will indicate a date that you MUST to contact them by. If you need more time, call the number on the notice or letter and request an extension. DO NOT ALLOW the time to expire without contacting them or hiring a representative to contact them for you.

What You Don’t Want to Do!

What you don’t want to do is nothing. Your tax problems will only get worse if you ignore them. If you cannot pay, there are a number of potential solutions available to those who are otherwise in compliance. In compliance means having all tax returns filed and any balances paid or on a payment plan. If you have outstanding debts or unfiled returns, you need to get hire a Certified Tax Resolution Specialist.

Get Some Help

If you don’t know how to address the issue(s), have unfiled return/unpaid balances or just done feel confident, let the experts at Legacy Tax & Resolution Services represent you. Work with our team of Certified Tax Resolution Specialists to resolve your issue(s) quickly. Best of all, you don’t have to talk to the IRS or State; we can speak on your behalf.