Tax Day Is Over So What Happens If I Missed Filing My Taxes
Late tax filing is extremely common. In many cases, people simply forget to file their taxes. Many people are surprised after they file a tax return and find out that they owe more than can pay. When many people find out that they have tax problems, they want to ignore them. However, your problems will only get worse if you ignore them.
The Internal Revenue Service can be very aggressive when they are pursuing collection. They are also increasing the number of audits that they do. They have a good reason for doing this. The government needs money in order to function. Most of this money comes from your income tax.
What Happens if you Have Missed Filing Your Taxes?
There are many negative things that can occur as the result of late tax filing. You could possibly be charged penalties if you do not file your tax return. Failing to file a tax return is a misdemeanor, so you could be sent to jail for up to a year. However, the IRS would rather collect the money instead of send you to jail. If you voluntarily work with the IRS, then you will likely be able to come up with an agreement with them and avoid jail.
You could also be charged steep tex penalties if you do not file your taxes. You may be charged 5 percent every month until you reach the maximum 25 percent interest rate after five months. Three percent interest will also be added. You will also be charged a 0.5 failure to pay penalty. Fortunately, there is a cap put on the number of tex penalties that you can be charged per year. You cannot be charged more than 25 percent in interest in a given year. However, interest can be added to your tax balance.
Dealing with tax problems can be scary. However, there are some cases where your tax balance be reduced. You may be able to get penalties removed if one of the following things apply:
One of your family members died
You have a mental illness
You received bad advice from an accountant
Extended military service
You will not be charged any penalties if the IRS owes you money. However, you could lose the refund that you are entitled to if you do not file a return within three years. You may also have a harder time getting a loan if you do not file your taxes. You are often asked to provide copies of your tax returns when you are applying for a loan.
Furthermore, the IRS may file a substitute return for you if you do not file a tax return. This means that you may not be able to get the credits and deductions that you are entitled to. You will also have 90 days to pay your past due balance. You also have the option of filing a petition in tax court.
If you fail to pay your taxes, then there are many things that the IRS can do in order to get you to pay. They can put a levy on your bank account. They can also put a lien on your property. If that occurs, then they can sell your property in order to satisfy the tax debt.
What to do if You Miss the Filing Date
There are several things that you can do in order to remedy your tax problems. The first thing that you will need to do is find all of your tax returns. The Internal Revenue Service will not resolve any liability until all of your tax returns have been filed.
Do not be alarmed if you receive a demand for payment from the Internal Revenue Service. It is likely more than what you owe. The amount on the demand for payment does not have any tax provisions.
You may also have the option to settle, which means that you may be able to pay less than what you owe. You and the Internal Revenue Service will be able to negotiate a settlement.
The amount of time that it takes to settle IRS problems can vary. You may be able to settle your taxes in as little as a few months. However, it may take several years to settle your taxes. The best way to settle these problems is to follow all of the instructions that the IRS gives you. It is also a good idea to work with a tax attorney.