Many people forget to file their tax returns, but the problems really begin as more and more time passes until you take action. If you’ve missed your last tax return or never filed one for a previous year, the good news is that things can work out very well as long as you figure out the best course of action. Getting in touch with a tax professional is a first great step in resolving the dilemma of a non-filed return, because sooner or later the IRS is going to come after you.
Jail time is in fact a possibility for non-filing taxpayers. Penalties and interest are another major concern. Depending on how long it’s been since your missed filing, there may be a variety of options you can choose to file late and work out an agreement to pay back taxes or otherwise sort out the situation.
It’s important to note that the IRS has many actions it can take from their side. Besides contacting you and holding penalties over your head, the IRS can file your delinquent return for you. Let’s be clear here: that’s not a good thing and they’re not doing you any favors. A “substitute return” filed for you by the IRS will pretty much maximize the taxes you owe; they will not make any deductions or claims on your behalf.
Taxes are a sticky issue, and there are good reasons why people visit tax pros for advice and assistance. The IRS will only tell you their rules in a sort of legalese, and they have little obligation to offer helpful advice. A tax advisor can help you explore your options like brokering the penalties, interest, and taxes that you face. Like any debt collectors, the IRS might even be willing to negotiate the penalty fees – but you need a tax professional by your side to have little leverage in negotiations.
It’s a frightening and stressful time when delinquent tax returns catch up with you. No one expects you to know all the best actions to take, but thankfully you can get the help you need from an expert tax pro. Let us help. Contact us to get started.