Avoid penalties for not paying IRS taxes
  • March 17, 2016
  • admin
  • 0

The IRS never forgets. It’s evident from various news flashes about people being chased around for non-payment of taxes, for years. In one such instance, the Internal Revenue Service followed the trails of a company and collected a 30-year old tax debt! In 1982, the company was unable to pay off its tax debts  due to insufficient fund, and later filed for bankruptcy. The IRS, in addition to the actual amount owed, charged a penalty of 100 percent for tax evasion. Examples like this remind us of the persistence, power, and reach of the IRS.

In this post, we discuss the finer lines of the consequences of failing to file your IRS taxes.

Late Penalties

Taxpayers must file their tax returns within the stipulated timeline to avoid late payment penalties. The penalty for late filing is applicable following April 15 every year, which equals five percent of unpaid taxes you owe every month. The combined penalty for failure to file and pay can eventually add up to 47.5 percent (22.5 percent for late filing + 25 percent for late payment) of the tax you owe.

Tax Refund Forfeiture

The IRS does not hold back your tax refund for an indefinite period. When you owe a reimbursement from the Government, it gives you three long years after the year of filing taxes to claim your tax refund. If, however, you cross this timeline, the IRS forfeits your unclaimed refund.

Reimbursement Delay

Delayed reimbursement of your tax refund is one of the harsh consequences of filing your taxes late. Filing your taxes at the last moment and claiming refunds not only results in paying a penalty but also, holding up refunds with the IRS. In fact, if you file your taxes late, you are unable to save or invest that money to achieve higher returns.

Substitute for Return (SFR)

The IRS makes several attempts to contact delinquent taxpayers and remind them of filing their taxes within the stipulated time period. It also reserves the right to prepare and file a substitute for return (SFR) on behalf of the taxpayer that calculates payable taxes based on taxable income and the applicable penalties.

When preparing the SFR, the IRS does not consider if you were married jointly filing taxes, had dependents to claim for that year, and any deductions or credits that may minimize your taxable income. You, therefore, end up paying more taxes based on SFR calculations. If you still fail to pay the taxes that the IRS has assessed against you, it starts collection proceedings to collect the outstanding taxes.


The discussion in this post consolidates the fact that tax evasion is impossible as the IRS always follows tax trails. It is, therefore, advisable to file your tax returns on time not paying your taxes at all. Consulting a tax attorney can help you to resolve all your IRS-related issues. If you wish to learn more about the implications of IRS tax evasion, or need expert advice on tax management, feel free to connect with one of our representatives for a no-obligation consultation.

Please follow and like us:

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!
Quick Inquiry


    Enter the text you see above