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I made the mistake of hiring my cousin (a CPA) to do my personal taxes for 2012. He's done mine before, and others in the family, without a problem, but for some reason he has become extremely difficult to get ahold of, and my 2012 taxes still have not been filed (I believe some extensions were put in, but still, it's May of 2014!). I did my 2013 taxes myself online, so they're done.

He tells me that he does not anticipate any money to be owed, but I don't know if that's certain. (I didn't make a lot of money that year--maybe 60K).

I know nothing about this stuff. Am I in trouble? Will I be hit with interest/penalties? He has all my paperwork (I probably have copies... somewhere...) Should I go somewhere else and start fresh?

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    You can get a tax transcript from the IRS by mail or view it on-line. This will tell you whether a return has been filed for 2012 or not, and what exactly your cousin has done for you (e.g. file extensions etc). – Dilip Sarwate May 3 '14 at 1:49
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I know nothing about this stuff. Am I in trouble?

You might be. If you don't file your return the IRS may "make up" one for you based on the (partial) information they have. Then they'll assess taxes and penalties and will go after you to pay those.

Will I be hit with interest/penalties?

You may if any money is owed. You may also lose the refund if you wait for too long (3 years after the due date). You may also be hit with the penalties for non-filing/late filing by your State. Not owing to IRS doesn't mean you also don't owe to the State - you can get hit with interest and late payment penalties there too.

He has all my paperwork (I probably have copies... somewhere...) Should I go somewhere else and start fresh?

He must return all the original paperwork you gave him. He can be disbarred if he doesn't.

If you did 2013 yourself - what was significantly different in 2012 that you couldn't do yourself? If nothing - then just do it yourself and be done with it. You can buy 2012 preparation software at very deep discounts now. Otherwise - yes, go somewhere else. Busy season is over and it shouldn't be difficult to find another preparer/EA/CPA to do the work for you.

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I would read this irs page to get an understanding of how this might negativity affect you. There is an 800 number at the bottom of the page, I would call them and find out what your cousin did file on your behalf (ie Extension).

I would get your original paperwork back from your cousin (or look for copies) and get your return done as soon as possible (either by another CPA or yourself). If you do owe, you owing more every day thanks to interest. If you have a refund due, then get your refund.

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It would seem to be in your best interest to file, and that probably means that you should do all you can to get your documents back.

If you are in fact owed a refund then there is apparently no penalty to filing late.

If you instead owe taxes, you better file in any case since the fees stack up pretty fast: 5% per month after the due date up to 25% of the taxes owed.

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  • OP does not specify if only federal or federal and state taxes are of concern. If state taxes are involved, then additional clarification needed. The referenced article only considers IRS. Am I right? – Vlad Didenko May 3 '14 at 4:32
  • That's right, but i'd just take a guess that state taxes probably have very similar approach to unpaid taxes. For example: California penalties. – mlathe May 5 '14 at 19:49

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