Unfiled tax returns settlement
  • June 17, 2024
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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 and what the consequences of not filing tax returns are. 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 fair knowledge about common tax problems such as unfiled tax returns. In this blog, we discuss the frequently asked questions about unfiled tax returns, the consequences of years of unfiled tax returns, and ways in which IRS tax attorneys in Fort Worth help taxpayers with back taxes.

Frequently Asked Questions about Unfiled Tax Returns

In this section, we answer five frequently asked questions about unfiled tax returns. 

  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 a maximum prison sentence of 1 year and 5 years, respectively. Taxpayers can avoid criminal prosecution for unfiled tax returns with timely guidance from a professional IRS tax attorney in Fort Worth.

  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 that they 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 failing 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 outstanding tax liability but can go up to 25 percent. The tax return filing status is assessed every month. In cases of unfiled tax returns, 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 terms and fines of up to $25,000. We will discuss the consequences of unfiled tax returns in detail in the next section of the blog.

  4. 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, filing unfiled tax returns is compulsory within three years of the due date.

While it is a good practice to file tax returns on time; sometimes taxpayers miss 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. Seeking an attorney’s help on back taxes will help you avoid punishing consequences.

Consequences of Unfiled Tax Returns

Negligence or the inability to file a tax return, when you owe the IRS, is an invitation to trouble. Many taxpayers are unaware of the fact that an unfiled tax return is worse than filing a return and not paying the due amount. If you are unable to pay your taxes, the IRS has avenues to help you pay what you owe the agency. Not filing a tax return is a crime, and you could be severely punished by the IRS. This section of the blog gives a brief overview of the four main consequences of not filing a tax return.

  1. Paying penalties and interest

    Not filing a tax return exposes you to penalties and interest payments. If you owe taxes, two penalties you may face include:

    • Failure-to-file-penalty: A late penalty, which is 5 percent of the total tax due, is imposed when you do not file a return. The penalty grows for every full or partial month you don’t file your taxes, and can grow to 25 percent.
    • Failure-to-pay-penalty: When you don’t pay outstanding taxes, the IRS imposes a penalty of 0.5 percent of what you owe.

    The IRS also charges interest on unpaid taxes, which is between 3 and 10 percent, on a quarterly basis.

  2. Loss of refund and other tax benefits

    The IRS gives you a time period of three years to file unfiled tax returns to claim a refund. If you don’t file the tax in time, consider any money owed to you by the IRS lost. The same time limit is applicable when taxpayers want to claim a tax credit. If you don’t file a return, you cannot claim the credit in later tax years. Self-employed individuals do not get any disability benefits or social security retirement if they don’t file their returns.

  3. A substitute return is being filed on your behalf

    If you do not file a return, the IRS might file a substitute return using your 1099 or W2s forms. While you may think of a substitute return as relief from the hassles of filing unfiled tax returns, it eventually costs you more in the long run. The reason being that when a substitute return is filed, the taxpayer gets one exemption and a standard deduction. If you qualify for a tax credit, have a substantial amount of itemized expenses, or dependents, none of them would be considered as a waiver, which will reflect in the form of an exaggerated tax liability.

  4. Face collection actions

    If the IRS performs an assessment of the substitute return, you are close to facing collection actions. The type of enforcement depends on the amount you owe the IRS and the circumstances that led to your non-filing of your tax return. The IRS may seize your assets, including bank accounts, home, vehicle, or other personal property, place a lien against your property, or turn the issue into a criminal case. If the IRS takes hold of your assets, SSI, child support payments, and disability benefits are exempt from seizure.

The IRS has an Information Returns Program (IRP), a computer system to match W-2 wage statements with the 1099 income reports of employers. If the system doesn’t find a match with the 1099 report, it automatically starts Taxpayer Delinquency Investigations to generate notices to the last known address. If there is no response, the IRS contacts the taxpayer, requesting that they file unfiled tax returns within 30 days. The IRS expects every taxpayer to file their returns and pay any amounts owed the agency by the 15th of April every year. 

You may request the IRS to extend the deadline for a few months, or consult an IRS tax attorney in Fort Worth for assistance. As mentioned earlier, failure or negligence to file a return can cause financial distress, and the IRS may consider you a criminal non-filer, which has legal consequences. If you have a serious IRS problem, such as a delinquent tax return, speak with Nick Nemeth at the Law Office of Nick Nemeth, PLLC.

4 Ways to Settle Unfiled Tax Returns with the IRS

If you want to file and settle unfiled tax returnswith the IRS, consult an experienced IRS tax attorney in Fort Worth at the Law Offices of Nick Nemeth. We have a team of reputable IRS tax relief attorneys who have successfully helped many taxpayers settle their IRS debts. Here is a brief overview of some ways to settle unfiled tax returns.

  1. Offer in Compromise

    If you owe the IRS taxes more than you can afford to pay, you may be eligible to settle the debt for an amount less than the actual amount owed. In such cases, you need to apply for an Offer in Compromise (OIC) after checking your eligibility. OIC is a payment plan that requires a taxpayer to pay either a lump sum amount or follow a short term payment plan. Schedule a consultation with one of our tax attorneys to check whether you qualify for OIC.

  2. Installment Agreement

    Under the Installment Agreement provision, the IRS allows financially-distressed taxpayers to pay their outstanding debts through monthly installments over a stipulated period. If a taxpayer meets the minimum requirements and the IRS is convinced by their reasoning, it would stop all collection efforts and also eliminate the possibility of wage garnishments, levies, or other enforced collection methods.

  3. Currently Not Collectible Status

    Under the Currently Not Collectible program, the IRS releases a taxpayer from paying the unpaid taxes for a stipulated time. The IRS will declare a taxpayer “Currently Not Collectible” and unable to pay for the stipulated time after receiving certain evidence. It is however a temporary provision that simply buys some time for taxpayers to clear their outstanding tax liabilities.

  4. Tax Filing Extension

    Tax filing extensions help taxpayers who are unable to file their taxes before the deadline. In such cases, taxpayers can request an extension of the deadline by filling out Form 4868. It is, however, important to remember that the provision only gets you an extension on the filing date; the date of payment remains the same, which is usually April 17th.

Need Help with Unfiled Tax Returns? Contact Us!

Dealing with unfiled tax returns requires a thorough knowledge of IRS tax laws, which is the core competency of the team at the Law Offices of Nick Nemeth. Discuss your case with an experienced IRS tax debt attorney and take the burden of unfiled tax returns off your shoulders. Whether you are looking for an IRS tax relief attorney in Fort Worth, Texas, or any area in Texas, look no further than the Law Offices of Nick Nemeth. For a free case evaluation and consultation, simply call (817) 623-5399 or fill out our contact form, and we will take it from there.

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What Our Clients Have to Say

Brent VahleBrent Vahle
19:13 02 May 24
I called to see if they could help reduce some penalties and fees. The person I spoke with told me it might be counterproductive for them to take my case since their feels would likely equal the amount of penalty/interest abatement. I decided to pass on moving forward but was so happy to hear a legal team, or any business for that matter, who has that much integrity. I feel most others would likely try to take my money anyway. I hope I never have to go through this again, but if I do, I will definitely use the Law Offices of Nick Nemeth!
Jason WinkleJason Winkle
18:44 02 May 24
Jaime Flores was very friendly, professional, and knowledgeable. She gave me some very valuable information which helped guide me with a plan of action. The free consultation is very much appreciated.
Matthew SwigartMatthew Swigart
12:14 02 May 24
Great attorney who was able to provide quick and useful advice. Although my situation did not warrant their services, they still took the time to discuss solutions I could explore. I highly recommend visiting this office!
Tony PantojaTony Pantoja
12:57 09 Apr 24
Very professional and very knowledgeable, Jamie Flores was very straight forward and professional, a firm that doesn’t just take your money, Thanks
Carla AtwalCarla Atwal
10:52 02 Apr 24
Nick was wonderful in guiding me with direction on some tax questions I had. He was concise, and to the point, and was happy to provide general info to me at no charge. I truly appreciate him and would highly recommend him.
Miguel AlvaradoMiguel Alvarado
15:56 25 Mar 24
By far the best attorneys I have ever worked with. They’re are very helpful and supportive from day one. They went above and beyond to make sure all my documents were submitted on time and gave updates as soon as they received them. I cannot name a single flaw in their work. Their team of assistants are very professional and seem to all be on the same page. I’ve made multiple phone calls and sent a ton of emails to their staff and they were able to help me all through the course of the case. I cannot express my gratitude enough for how excellent they handled my case.
Lucy FoyLucy Foy
06:55 19 Jan 24
My first appointment I had with, Tax Attorney Nick Nemeth, gave me such a sense of relief. He listened and gave me his professional advice, Mr Nemeth took my case. I was well kept updated, by phone calls and letters. That really impressed me and gave me so much confidence in them. The case went on for a couple of months. The day I received the call from one of his team members Kyle, informing me that the case was resolved and that I owed absolutely nothing to the IRS, I was overwhelmed with joy. I would recommend this law firm to anyone that needs help, with any tax issue. Thank you, to the Law Firm of Attorney Nick Nemeth and his team.
Bradley RunyonBradley Runyon
20:17 13 Jan 24
I received a tax bill in the mail from the IRS last year in 2023. The fees and penalties I owed were something I myself could not afford. I reached out to Nick Nemeth's firm and received the best experience you could imagine. The team was professional, educational, and fast. If you have a tax issue with the IRS using another firm other than Nick Nemeth's would be an error in judgment. I would recommend their services above others.
Sue HulsemanSue Hulseman
19:55 11 Jan 24
Working with Nick Nemeth and his team to resolve my debt with the IRS was the best decision I could have made. I felt such relief knowing I didn’t have to deal with the IRS myself. They did a wonderful job and were responsive to my questions and kept me abreast of my case. My outcome was exactly what I was hoping for. I strongly recommend using them if you have an issue to resolve with the IRS.
20:53 21 Dec 23
I had an incompetent tax preparer, who also ignored several notices from the IRS, which in the end resulted in a lien on my property. I did not know what to do and an attorney friend recommended that I contact the Nick Nemeth Law Offices. I met with Jamie Flores and Ivan Nalbantov in December 2021 for a free consultation, and right away was impressed by their thorough examination of my paperwork and extensive knowledge of IRS tax laws. I felt not pressured and appreciated their advice and in the end decided that I would pursue resolving the issue by myself. I paid the IRS Civil Penalty and, as recommended also submitted a letter to the IRS requesting a refund and explaining what happened. I am glad to report that my persistence finally paid off. My case took two years to resolve and I finally received a full abatement/refund check from the IRS in December 2023. I could not have done this without the straightforward recommendation of Jamie and Ivan; and I highly recommend the Nick Nemeth Law Offices to anyone needing help with the IRS.
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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