For years you haven’t filed any tax returns, did you not file your returns because you couldn’t pay the taxes owed? You’re not alone! Businesses, adults and even some young people earning money must file tax returns each year. Failure to file can cause huge problems. Repercussions of delinquent tax returns can pop up years later, even when you’ve forgotten about them. Failure to file one year can cause the IRS to keep a refund you are owed for the next year as well! Other consequences are much more serious. Don’t wait for the IRS to contact you, and don’t let the IRS prepare a return for you, it’s not in your best interest. They will use the highest tax rate when they prepare your unfiled delinquent tax returns for you.
If the IRS has not yet notified you, they will catch up to you sooner or later. Computers are becoming more sophisticated with technology and the sharing of data. The IRS may also seek to impose a criminal offense for failure to file tax returns as required. When you do file your returns, the tax returns must be accurate and truthful. If false returns are detected by the IRS, a fraud referral to the Criminal Investigation Division will be generated. Failure to file returns is a FELONY and subject to criminal and civil penalties. This means that you can go to prison, pay substantial penalties and be financially destroyed. Willful failure to file returns can result in a punishment of one year in jail and a $25,000 fine ($100,000 in the case of a corporation).
Delinquent tax returns should be filed immediately, even if you cannot afford to pay the taxes owed. While filing delinquent returns without paying the bill will cause interest and penalties to begin accruing, failure to file on-time dramatically increases these penalties. These combined penalties can be as high as 25 percent of the taxes owed! When you do file, you must prepare and file tax returns that are accurate and truthful as the returns will be examined by the IRS. We can guide you to becoming current with your tax return filing obligations and then analyze your situation to determine the best course of action. For many taxpayers, this tax resolution typically leads to an Offer in Compromise.