Consequences of not Filing a Tax return or Not Paying Tax Owed
Back Taxes Help
- Posted:
3/15/2009
There’s a fast track to big time trouble with the IRS, and that’s failing to file or pay your taxes. If you neglect your responsibilities you’ll receive Civil and Criminal penalties, not to mention high interest and penalty charges. It does not pay to ignore your taxpayer obligations.
IRS Penalties and Interest - Failure to File Penalties are imposed on those who fail to file their taxes on time. Interest is charged on the penalties due. This all adds up quickly, so it’s important to correct this issue immediately.
Losing your Refund - If you don’t file a Tax Return you cannot obtain your Tax Refund, and if you wait too long to file you would loose your refund altogether.
Criminal Charges - Failure to file your Tax Returns is a criminal offense. You could receive a fine of up to $25,000 and/or a jail sentence of one year for each unfiled year.
How Failure to File Affects Tax Debt Under normal circumstances, the Statute of Limitations for IRS Tax Debt is ten years. However, the Statute of Limitations does not start until a Tax Return has been filed. This means there is no Statute of Limitations for assessing and collecting the Tax if you have not filed your Tax Returns.
Preventive Measures - If you can’t meet the April 15th deadline,
request an extension of time to file your taxes. You can do this using IRS Form 4868 “
Application for Automatic Extension of Time to File U.S. Individual Tax Return”. Failure to Pay Taxes Owed - Although you can file for an extension to file your Tax Return, you cannot receive an extension for paying taxes owed. It’s very important to contact the IRS if you receive any notice for payment.
Here are some of the actions the IRS may take to collect on taxes due:
1) Offset your Tax Refund
2) Levy Your Bank Account or Wages
3) Issue a Tax Lien
4) Seize Assets to satisfy your debt
If you’re missing tax years, now is the time to get back in compliance with the IRS. The IRS is ramping up collections efforts every year, with 2009 slated to be a record year for debt collections. Contact a Tax Resolution Professional if you need assistance preparing and filing
IRS Back Taxes.
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