• September 18, 2020
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According to Forbes, about 7 million people in the USA fail to file their tax returns each year. The IRS, as a part of its National Research Program, released a study in 2011 that indicted government losses of up to $28 billion per year as a result of non-filing. These huge losses force the IRS to impose heavy penalties for unfiled tax returns. That is why it is advisable for every taxpayer to know how to navigate unfiled taxes. To help, let’s discuss everything you need to know about filing unfiled tax returns and the penalties for failing to do so. Read on!

1. When Do Unfiled Tax Returns Become Criminal?

The willful failure by taxpayers to file tax returns is a misdemeanor according to Internal Revenue Code (IRC) § 7203. People facing this charge can be punished by up to one year in jail and a fine of as much as $25,000. Besides, taxpayers who fail to file returns multiple times may be guilty of an overt act of evasion and punished for the felony under IRC § 7201.

Related Blog: 3 Common IRS Tax Problems for 2020

2. What are the Penalties for Late Filing?

If a taxpayer fails to file a tax return, they may have to pay a late filing penalty of five percent of the total tax amount due per month. This penalty is not a one-time computation and is added for each month if a taxpayer delays in filing unfiled tax returns for up to five months. Even in the event that taxpayers can’t pay their taxes, they still need to file so as to qualify for an installment payment program.

3. What are the Penalties for Failing to Pay My Taxes?

In addition to the late filing penalty, taxpayers who have unfiled tax returns are also subject to a failure-to-pay penalty of five percent per month, up to five months. This penalty adds up significantly when combined with compounded interest, other penalties, and even interest on the penalties.

Related Blog: Answering Frequently Asked Questions about the Coronavirus Relief Law (CARES Act)

4. When Does the IRS File a Substitute Return?

When taxpayers fail to file their federal tax returns for a while, Sec 6020 authorizes the IRS to prepare a substitute tax return for the concerned taxpayer based on available information such as Form W-2, Form 1099-INT, Form 1099-DIV, Wage and Tax Statement, Interest Income, and Dividends and Distributions issued to the taxpayer.

5. What Efforts does the IRS Invest in Tax Collection ?

The IRS can garnish taxpayers wages, seize their personal property, levy their bank accounts and other investments, and file a tax lien on their real estate to collect outstanding taxes.

How can I get Help Filing my Taxes?

Do you have unfiled tax returns? Unfiled tax help may be available if you qualify for Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE). Contact the Law Offices of Nick Nemeth now and let’s discuss your IRS tax problems and find the best way to file any unfiled tax returns in Dallas, Texas. Simply call (972) 426-2553 or email us at jamie@myIRSteam.com, and we will take it from there. Our consultations are free and are no obligation as well.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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