No one wants to see themselves on the wrong side of the IRS, which is why it is important to take all possible measures to abide by the filing guidelines stipulated by the authority. That said, many people, despite paying taxes, ignore the significance of filing a tax return. Most US citizens and permanent residents in the country are required to file a tax return if their annual income exceeds a certain amount. If you haven’t filed your income tax return, this article could be an eye-opener. Read on as we present the possible repercussions of an unfiled tax return.
Possible Repercussions of Not Filing a Return
If you qualify and are required by law to file a tax return, but are unable to do it by the due date including extensions of time to file, it can lead to any one or more of the following repercussions:
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Failure-to-file Penalty – The first step the IRS takes on eligible taxpayers that fail to file a return in time is levying the failure-to-file penalty, unless they have a “reasonable cause”, a list of which has been stipulated by the IRS.
Failure-to-pay Penalty – If a taxpayer has not paid their tax obligations in full by the due date of filing the return, they may be subjected to the failure-to-pay penalty, unless they have a “reasonable cause”, or the IRS has approved their request for an extension.
Interest on Unpaid Taxes – Even if a taxpayer has been granted an extension to file or pay their taxes, the interest is still charged on the taxes not paid by the original due date. Similarly, the IRS also charges interest on penalties.
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Note: In cases wherein taxpayers are to receive a tax refund, although there is no failure-to-file penalty; they risk losing the refund altogether if they do not file a return or claim it after the expiration of the statute of limitations. Keep in mind that you must file an original return claiming a refund within 3 years of its due date, after which the refund statute prevents the issuance of a refund check.
Given the seriousness of the repercussions that may arise from an unfiled tax return, it is strongly advisable for qualifying individuals to file their return as soon as possible, irrespective of their reason for not filing. If you need expert guidance to help you out, you can always count on the IRS tax lawyers at The Law Offices of Nick Nemeth. To schedule your FREE confidential consultation in Dallas, Fort Worth, Houston or anywhere else in Texas, simply call (972) 426-2553, or fill out the Free Case Evaluation Form and we’ll take it from there.