Failing to file a tax return with the IRS is an enormous mistake, one that can have very severe consequences. There are many methods used by the IRS to find out about unreported income, earnings, and other items that require a tax payment. If you do not file a return the Internal Revenue Service will catch this fact almost all of the time and then you could be facing serious financial penalties or even a criminal case in some situations.
If you owe taxes but can not pay right now failing to file a tax return will not make this situation go away, it will only compound the problem. The IRS will work with you to schedule payments that youi can afford. You may still have interest owed on the unpaid tax liability but the cost will be far less than if you do not file at all and are caught by the government.
Wage Garnishment Versus Voluntary Payment Arrangements
If you file a tax return but can not pay the IRS will usually make arrangements to accept payments. If you fail to file and then are caught the IRS may not be willing to accept payments and a wage garnishment against your paycheck may be issued. If the taxes owed are substantial then the IRS may issue charges of tax evasion, and this is a criminal offense that can carry prison time as a potential sentence.
Tax Refund And Liability Considerations
If you fail to file a tax return you could miss out on any tax refund that you are entitled to. Refunds for a period of more than 3 years in the past do not have to be issued by the IRS because the statute of limitation for the refund has passed.
Any delay in filing your income tax with the IRS will lead to larger penalties and more interest being assessed. Many celebrities have found out the hard way that the IRS does not play around when it comes to a failure to file tax returns. Wesley Snipes received prison time, and many other celebrities and well known individuals have been caught in this trap.
Financial Difficulty Is No Excuse Not To File
If you are facing financial difficulties the worst thing you can do is fail to file a tax return with the IRS. If you can not afford the initial tax liability then you will definitely have problems paying a greatly inflated amount once the IRS catches your failure to file.
Bankruptcy may be one option to get your finances back on track, and a chapter 7 filing can eliminate most debts so that your financial resources are freed up to pay your taxes. In some cases bankruptcy can even eliminate certain past due taxes. Discussing your specific situation with an experienced bankruptcy attorney will help you get the answers you want and need.
The bankruptcy attorneys at Richard West Law can provide a free debt consolidation consultation which will help you find the right answer for your unique debt problems and circumstances. Visit https://www.debtfreeohio.com or call (513)771-8700 or (937)748-1749 to get the answers you want, and the financial relief you are looking for.