From doing searches for the past few days on this site and looking for an answer through the search function I realize I am going to catch major hell for this, but I am still curious. When making the transistion from a "scrub" non-tax paying operation into a legal tax paying business would one expect to pay taxes from the time they started under the table to the present time? For the sake of the argument let's say it's been 2 years in business part time with about 20 accounts dealing with checks. I understand this individual must turn to an accountant and he will, but I wanted to get an idea of what he is in for. There is no need to turn this into a "you are going to go to hell for not paying taxes" lecture, but of course it is expected. I would think that the person would present himself to the accountant as beginning operations within the current timeframe to avoid back taxes and take a loss on the deductions that would have been gained 2 years ago, but I am just guessing.