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So this year my attorney had filed my taxes but then COVID happened and he was sick/out of the country but in reality the online forms were never submitted. He finally hand mailed them in the month of November. Now the amount that is pending is around 4k+ due to fines which I am okay to pay but there is an ongoing background check and I am scared this would show up.

My question is:

  1. Does late taxes show up as a negative point on your background check?
  2. Should I wait and contest my taxes or pay them upfront given my situation?

The taxes are limited to NY state tax alone, other federal were submitted.

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  • Are they going to check your tax records? Every background check is different. – Tymoteusz Paul Dec 18 '20 at 23:11
  • I am not sure how to find that, its a background check and they asked for my name, SSN, drivers license. – BackgroundChecker1994 Dec 18 '20 at 23:30
  • I did sign up for the FCRA Background Check – BackgroundChecker1994 Dec 19 '20 at 0:07
  • Unrelated, but this sounds like your attorney should pay your fine since he screwed up?! – ThiefMaster Dec 21 '20 at 13:54
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The details they check for should be defined in the paperwork you signed authorizing them to gather the information. What they can collect also depends on the job you are applying for.

  • If you want to work for the IRS or on a contract with the IRS they will want to know you aren't a tax cheat. This could also apply to other financial jobs or ones in law enforcement.
  • In many situations they are looking for criminal activity.
  • In others they will care about any legal issues beyond a speeding ticket.
  • In most they will want to verify that your have worked for the companies you put on your resume/application.

In some cases related to financial information in my experience they have you specifically give authorization for the financial records, instead of burying it on a general form.

And by tax cheat I don't mean that you are a criminal. They do want to know if you have been audited and the result of that audit, or if you had to pay penalties and why.

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I have not been in this position but I have an associate that has.

1.Does late taxes show up as a negative point on your background check?

No, they don't. Nobody will know, unless the IRS takes you to court. Court records are public, in which case this will show in most background checks

  1. Should I wait and contest my taxes or pay them upfront given my situation?

I would follow your accountant's advice. It is generally best to pay sooner rather than later.

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You're fine. Tax fines won't show up on a background check generally - I'm not even sure of any valid reason for them to appear.

Normally employers can only request information that they have a legitimate reason to request. Tax filing penalties don't really meet this criteria (and also, if they did, a lot of people would be ineligible for jobs - most everyone has messed up a tax filing at some stage in their life).

I'm not sure about the contesting - honestly, the tax department is generally not very lenient, and somehow accountants (and lawyers) are never on the hook for the crap they cause. I mean, I get you're asking about whether you can contest and pass the job check (you can!). But I just don't know if it is worth the effort - look, it is worth the effort, just don't get your hopes up about winning.

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I don't believe that owed taxes will show up in your reports until they get to the point of liens and garnishments.

I can't speak directly to New York State, though. They're an aggressive lot.

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First of all, ALWAYS pay your taxes. I think you are finding out why. So the answer to your second question is YES.

Secondly, the IRS reports to nobody, except maybe the NSA, so nobody will ever find out you had a tax problem unless it goes to court, then it becomes public.

Reputable tax preparers normally reimburse clients if they make a mistake which results in a fine for the client. It sounds like your attorney does not fall into this category. Is this guy even an enrolled agent? If not, it's a lesson learned: do not let amateurs handle your taxes.

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