For one reason or another, many people end up with either late tax return filing issues or unfiled tax returns. If you are late filing your tax return, it is critical to go ahead and file. Not filing tax returns leads to tax debt. Scammahorn Law Firm, PC can tell more about unfiled tax
Penalties for not paying the IRS include:
* A Federal Tax Lien- With this, you cannot buy a house, refinance your house, sell a house, receive student loans, or access credit from most lenders until your taxes are paid.
* Cash Taken from your Bank Account- The IRS can take money from your bank account, social security, and retirement funds.
* Social Security- The IRS can garnish a percentage of your Social Security benefits.
* Prison- If the IRS decides to prosecute you for tax evasion, they can send you to prison and seize your assets.
Failing to file all your tax returns can be a federal crime. If you fail to file, do not make the mistake of believing that the IRS will not notice. It might take some time, but they will find out and will seek payment. Often, the payment the IRS asks for is more than what you originally owed. Late tax return filing is a lot better than never filing.
What can happen when you do file
If you wait to file until after you are contacted by the IRS, you are going to face stiffer fines and penalties. You might be wondering how the IRS can still charge you without a tax return to base payment on. What they do is create a Substitute for Return or SFR. An SFR is an educated guess by the IRS on how much money you owe. Often, the SFR demands more money than what you would have owed if you had filed on time.
So if you have not been contacted by the IRS, file now so that you don’t have to pay more! You should get through the process with minimal fines and penalties.
You could even be surprised by the results of filing past due tax returns. We had one client come to us with SFRs totaling over $100,000 in tax bills. We submitted amended returns that took into account the deductions he was due, and the IRS eliminated his back taxes and ended up paying him a refund.
So what is stopping you from filing?
If it is because you can’t afford to pay, DO NOT LET THIS STOP YOU! The IRS will not accept that as an excuse for not filing a return and will still expect payment on what you already owe. The IRS has payment plans and other alternatives so that you can pay and remain in good standing.
The bottom line is that the IRS will find out if you have late tax return filing or unfiled tax returns and will get their payment one way or another.
Disclaimer: The information here should not be taken as tax advice, but as common sense responses to IRS notices and procedures. Contact experienced tax attorneys in Dallas at Scammahorn Law Firm, PC for more details.