fbpx

5 Tips If You Haven’t Filed Your Tax Returns

All American citizens know how important it is to file your tax returns on time, however, there are many who, for a number of reasons, haven’t done so for years. The good news is if your accounts are not up to date, but the IRS owes you money, you won’t have to pay any penalty charge. Unfortunately, if you haven’t filed on time and you owe taxes, you may be in for quite a big trouble.

You have no taxes due and you haven’t filed

How you file your tax returns matters, because you may be missing out on good refunds. In a recent post, Lifehacker quoted CNN on the IRS announcement that there are $950 million waiting to be claimed by one million taxpayers who haven’t filed their returns in 2012 and therefore, not claimed their refunds. If you are one of the people who didn’t bother to file in 2013 because you were certain you don’t owe anything to the IRS, you better file your return ASAP. Taxpayers only have 3 years to claim refunds before they are void. Do you really want to lose extra money?

You owe taxes, but you haven’t filed

 Not paying your taxes is an offense, so by withholding payment, you are breaking the law. As a result, you may be fined up to $25,000 per tax year, for which you’ve missed a payment. It gets uglier – you may even have to go to prison for up to a year. On the positive side, such scenario is less likely, because the IRS would prefer to collect what you owe and they have many schemes to fit the payments around your lifestyle, just so that they can get their money after all. There are more penalty charges though:

  • 5% per month of the unpaid amount (capped at 25% after the 5th month)
  • 0.5% failure to pay penalty per month for every month you had owed money

What happens if you don’t pay? IRS can:

  • Freeze your accounts
  • Take money directly from your wages
  • Put a lien on your home/property

 

What options do you have to minimize your costs

There’s no way you will be forgiven the taxes you owe, but in some cases, you may be spared the penalty charges. For such to happen you will have to prove that you had a valid reason, called “reasonable cause” for not paying your taxes on time. The IRS is unlikely to waive interest charges, so you should be mindful of that too.

What qualifies as “reasonable cause”

  • The death of a family member or a person, really close to you.
  • You have gone through a divorce and as a result, your ability to make payments or deposits has been materially impaired.
  • You were absent for reasons beyond your control – you went to prison, a rehab or have been held a hostage abroad.
  • Destruction of your records due to a natural disaster or casualty.
  • Wrong advice was given by a financial professional, such as tax advisor or CPA
  • The wrong or misleading advice was given by an IRS officer in writing, on the phone or in person.

Download here

 

What’s next

 You will have to file for all years you have missed. Try to collect as much paperwork as possible and if some are unavailable put the most accurate information to the best of your knowledge. You can also request a transcript of your unpaid taxes from the IRS.

After you have filed all your outstanding returns you will have to pay the amount you owe. In particular cases, you may be eligible for an offer in compromise, installment payment plan, and a hardship status. Details about all these and other schemes available to taxpayers through the IRS you can find in our previous post here.

Make sure you always turn to the right professional when it comes to your taxes. Inexperienced and dodgy CPAs and tax advisors can cost you a lot of money and create significant trouble for you. FAS CPA & Consultants have an impeccable reputation in Miami and we are ready to assist you with all your tax matters. 

If you don’t qualify for Currently Non Collectible status do not despair. Instead, contact a good CPA and ask what other options may be available to you that will correspond most appropriately to your current financial situation.

 Join our Facebook Group IRS Debt Tax Resolution for more useful tips.
 
Fulton Abraham Sanchez, the founder of FAS CPA & Consultants of Miami, FL, is a Certified Public Accountant. You can email him to fa@fascpaconsultants.com.
 

Request a Confidential Consultation

FAS CPA & Consultants

9000 SW 137 AV Suite 224 Miami, FL 33186 T: 786-462-7899 E: support@fascpaconsultants.com

Your Name (required)

Your Email (required)

Subject

Your Message

Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized In Tax Planning, International Business, Wealth Management and Offshore Banking. You can email him to fa@fascpaconsultants.com or follow us on Facebook : FAS CPA & Consultants.

You may also like...

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

error: Content is protected !!