Did You Know You're Committing A Crime If You Have Unfiled Tax Returns_ LadyBossBlogger.com

Unfiled taxes invite trouble from the IRS, whether you do it intentionally or out of sheer negligence.

Not filing your return can land you in deep trouble.

You may face heavy penalties, interests, and fees, or even worse.

The IRS will eventually trace that you have failed to file and compel you to comply with the norms.

Obviously, the best way to prevent such a major problem is by filing your tax return well in time.

Conversely, if you have unfiled tax returns, you should seek legal assistance to resolve the issue.

Most importantly, you need to understand the gravity of the situation and take quick action.

Here are some reasons why you should take unfiled tax returns seriously.

Did You Know You’re Committing A Crime If You Have Unfiled Tax Returns?

1. Not filing tax returns is a crime

If you have not been taking tax returns seriously, you should start doing so.

It may come as a surprise to you that not filing tax returns is a crime.

It is even punishable and you may have to spend up to one year in prison for every year of unfiled return.

Though IRS does not put taxpayers in jail in most of the cases, the risk is always there.

Moreover, they will take some kind of action to collect taxes from you.

So it is always better to be regular with filing your tax returns.

2. You will have to pay penalties and interest

Another implication of non-filing is that you will have to pay penalties and interest to the IRS.

Those owing taxes may face two types of penalties.

The failure-to-file penalty is charged on those who do not file their return on time.

The penalty grows with time as you delay filing.

Failure-to-pay penalty, on the other hand, is charged if you fail to pay the outstanding taxes.

Further, you will also have to pay interest on the unpaid taxes.

3. The IRS will file a substitute return

If you fail to file your return, the IRS may file a substitute one on your behalf.

Don’t think that it is a service they are doing for you because it is actually a penalty that they are imposing.

This substitute return will not include any exemptions or deductions.

This means that you will end up paying more tax than you would have by filing on your own.

A higher tax obligation amounts to higher penalties and interest as well.

So it is always better to file your returns on time if you want to reduce your burden.

4. You will subsequently face collection actions

Once the IRS makes an assessment of the substitute return, they will subsequently take collection actions.

The amount you owe determines the type of enforcement action you face.

They will also consider the circumstances leading to the non-filing of returns.

The best way to deal with the situation is by consulting tax attorneys who are experts in unfiled returns because they can help.

The IRS may seize your assets, place a lien against property or even file a criminal case.

It is, therefore, advisable to hire an attorney even before they take action.

5. You will lose your refund and tax benefits

Not filing your tax return will make you lose your refund and tax benefits.

The IRS allows you a period of three years to file your returns for recovering tax refund subsequently.

If you fail to file in time, the refund amount will be lost.

Similarly, you cannot claim a tax credit for the same time limit.

If you are self-employed, not filing your returns means that you will lose on disability benefit or social security retirement.

Swift action can make a difference!

The reasons for taxpayers falling behind with their annual filings may vary but the results are always dire for them.

Whether it happens with a wrongful intention or just because of forgetfulness and procrastination, swift action is needed.

The penalties increase with every passing day.

Also, the chances of strict action by the IRS go up as you delay because they may suspect evasion or fraud.

Seek professional advice and take the right action for resolution sooner rather than later.

Non-compliance with filing tax returns is a serious issue.

If you have skipped the deadline, be sure to take timely action to avoid the wrath of the IRS.

It is best to take legal advice before things go out of hand and the authorities take action against you.

Collaborate with a seasoned tax attorney who can give you the right advice and even handle negotiations with the IRS on your behalf.

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