If you have unfiled tax returns, you may have many questions on your mind, especially if this has happened for the first time. Questions such as, how the IRS contacts taxpayers, what are the consequences of not filing tax returns, and what is substitute for return program. These are all common questions among taxpayers who have not filed their tax returns. While the Law Offices of Nick Nemeth can help you with unfiled tax returns and scores of other IRS-tax debt related issues, it is important for every taxpayer to have a fair knowledge about common tax problems such as unfiled tax returns. To help you, in this blog post, we answer five frequently asked questions about unfiled tax returns. Take a look.
1. Is failure to file tax returns considered a crime?
Intentional failure to file a tax return is considered a misdemeanor, while any form of tax evasion is considered a felony, with the maximum prison sentence 1 year and 5 years, respectively. Taxpayers can avoid criminal prosecution for unfiled tax returns with timely guidance from a professional tax attorney.
2. How does the IRS contact taxpayers who don’t file returns?
Typically, the IRS sends a notice through mail. These communications serve as a reminder to taxpayers. Delinquent taxpayers may also receive a notice demanding to file returns within 30 days. If the recipient ignores the initial warning mail, the IRS resorts to more stringent actions, including conviction.
3. What are the consequences of failure to file tax returns?
If a taxpayer does not file their tax return, the IRS charges a penalty that is usually 5 percent of their the outstanding tax liability, but can go up to 25 percent. The tax return filing status is assessed every month. In such cases, any entitled refund stands canceled. Even if a taxpayer files bankruptcy, they can’t include tax debt unless they are up to date on their filing obligations. In worst-case scenarios, defaulting taxpayers may face jail term and fines of up to $25,000.
4. What is a Substitute for Return (SFR)?
Substitute for Return (SFR) is when the IRS prepares an income tax return on behalf of a taxpayer. If a taxpayer fails to file a return within the stipulated deadline, the IRS takes the initiative to file a substitute for return. Generally, these returns assess a higher tax liability than the amount actually owed by the taxpayer. In other words, the IRS files a return and it would not give any exemptions or deductions to the taxpayer.
5. Can I file a tax return after the annual deadline?
Yes, you can. You can also e-file your tax return up to six months after the lapse of the original deadline. However, it is advisable to file tax returns on time to avoid unwanted penalties and interest. In case you wish to claim a refund, it is compulsory to file tax return within three years of the due date.
Need Professional Help? Consult a Tax Attorney!
We hope the above questions and answers on filing unfiled tax returns are helpful to you. While it is a good practice to file tax returns on time; sometimes taxpayers cannot avoid missing the deadline due to unavoidable causes. When it comes to tax issues such as unfiled returns, the IRS means business. If things seem to get out of hand, and you can’t handle it on your own, do not worry. We, at the Law Offices of Nick Nemeth, are always ready to help you with all sorts of IRS tax debt problems. To discuss your case, simply call (972) 426-2553 or visit our website www.myIRSteam.com and fill out a form fill and we will get back to you shortly.