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Late Filed Tax Returns! 6 Issues You Need To Know.

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Late Filed Tax Returns!   6 Issues You Need To Know.

Late Filed Tax Returns!  6 Issues You Need To Know.

 

Yah I know, it was just April 15th yesterday… time flies.  Here are some things that you need to know if you are considering going beyond the filing deadline. FYI – There’s another one coming up in October.

Crime- It is a crime to willfully fail to file a return.   While the IRS doesn’t typically go after the average person, each year they pick a few people to make examples of.  These are usually taxpayers that will get service in some news press.  Either way, don’t be the one they use as an example.


Lost Refunds- If you file a return more than three years after the original due date and there is a refund, that refund is barred by statute.  The IRS keeps millions of dollars each year as a result of unfiled returns.


Penalties- If you owe and fail to file a return, the IRS will assess penalties of up to 25% on the unpaid balance.  When you hear about people who cannot pay their taxes, it is usually as a result of penalties.


Audit- By failing to file returns or file a bunch of returns at once, you are increasing you chances of being audited. 


Substitute For Returns- If you fail to file a return, the IRS will eventually file one for you.  This return is known as a Substitute for Return (SFR) and it will not be in your favor.  The service will include all income, limited deductions and assess the tax.    Beware if your ultimate tax resolution will include bankruptcy, the tax liability for any year in which the service filed an SFR, will not be dischargeable.


Collections- Most permanent resolutions with the IRS require you to be in compliance.  This means that you will likely have to catch up all unfiled returns.  For most taxpayers, this usually proves to be difficult because the records at that point are usually less than perfect or non-existent.

Bottom line make sure you get your taxes filed.

Unfair Assessments Could Await Those You Who Do Not File Returns

Checklist of 36 Tax Filing Errors to Avoid

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