Tweet

5 Reasons to File Delinquent Tax Returns: There's Still Hope if You Haven't Paid Your Taxes This Year

Guest post by: Michael Rozbruch

Article Overview: Did you pay your taxes this year? You can run, but you can't hide from the IRS! Find out what you can to do resolve your back taxes and avoid IRS penalties.

5 Reasons to File Delinquent Tax Returns: There's Still Hope if You Haven't Paid Your Taxes This Year



The act of not filing your tax returns can lead to more significant financial problems in the long run. Not to mention, failure to file tax returns may be construed as a criminal act by the IRS, punishable by one year in jail and $10,000 for each year not filed. Needless to say, it's one thing to owe the IRS money, but another thing to potentially lose your freedom for failure to file a tax return. The longer you put off dealing with overdue taxes, the more serious your IRS problems will be. So I recommend filing any tax returns that are due as soon as possible to avoid additional interest, penalties and potential IRS collection tactics, such as a levy on your bank account.

With the federal budget deficit for the current year expected to top $1.8 trillion, Americans can expect more tax audits and increased IRS actions. So anyone who owes back taxes will want to avoid becoming targets of aggressive IRS collection efforts that can financially cripple them for life.

Here are 5 reasons to file your delinquent tax returns:

1) You can go to jail for not filing your taxes Even if you haven't filed your tax return for one year - it is still considered delinquent and could be construed by the IRS as a criminal offense. Actor Wesley Snipes didn't report more than $10 million to the IRS and he was convicted of three misdemeanor counts of failing to file a tax return. Richard Hatch, who won the first season of CBS's hit show Survivor, is in prison for failing to report $1 million in prize money.

The IRS goes after those U.S. taxpayers who try to avoid taxes, and Average Joes as are just as likely as high-profile individuals to be targets of the tax-collecting agency. At every level, the agency has become increasingly aggressive in pursuing tax cheats. Are you willing to lose your freedom because you failed to file your tax returns?



2) You can incur a 25% penalty for not filing your tax returns In this economic downturn, Americans may opt to not file because they don't have the funds to pay the taxes owed. The best thing for taxpayers in difficult financial situations to do is file their tax return, pay what they can and work with the IRS to establish a payment plan that will keep them compliant.

Additionally, if there are any delinquent tax returns that are due, they should consider filing these returns as soon as possible to avoid the wrath of any potential IRS action, such as a levy on their bank accounts.

3) You can incur additional penalties for not paying your taxes If you fail to pay your taxes due, you will incur additional penalties for failure to pay. Taxpayers who request an extension of time to file should keep in mind that this it is not an extension of time to pay. To avoid additional penalties, taxpayers should file by the deadline and pay as much as they can, even if they are unable to pay the entire amount due. You will still have a failure to pay penalty, but it's much less. Then you can work with a specialized tax resolution expert to help you negotiate a tax settlement.

4) You can be subject to an increased tax bill if the IRS prepares your taxes for you The IRS may prepare a "Substitute For Return" for delinquent taxpayers, in which they won't be able to file for all of their personal exceptions or allowable deductions. Because these returns are filed in the best interest of the government, the only deductions they'll usually see are the standard deduction and one personal exemption, subjecting them to a larger tax liability. So it's important for individuals to file their tax return as well as any prior delinquent tax returns as soon as possible to save money and avoid significant long-term consequences.

5) You must have all prior tax returns filed to be eligible for income tax relief All back tax returns must be filed before the IRS will even entertain any type of tax settlement like an offer in compromise or monthly payment plan arrangement. The good news is the sooner you take care of your delinquent taxes, the less penalties and interest you'll owe.

I believe there's a solution to every problem. For delinquent taxpayer, it's never too late for to resolve your tax debt and avoid IRS penalties.

Related Articles
  What To Do Before the October 15th Tax Extension Deadline if You Need Tax Help for Unfiled Tax Returns or IRS Back Taxes
  Your Unfiled Delinquent Tax Return Checklist: Stop the IRS Now and Avoid Steep Interest and Penalties from Accumulating
  How to Get IRS Tax Relief from Back Taxes or Unfiled Tax Returns
  How, Why and When to File a Tax Extension
  The Best Ways to Keep Ahead of the Game on Taxes
  Tax Tips for Small Business Owners
  How to Pay Back Taxes to the IRS Even if You’re Broke
  More Small Businesses Are Facing the Challenges of Delinquent Payroll Tax Problems
  Small Business Taxes In The US
  Biggest Mistakes Small Businesses Make When Faced with Delinquent Payroll Taxes and IRS Penalties
  Tips for Filing Tax Returns: Reduce Debt, Pay Back Taxes and Avoid IRS Problems
  Reduce Back Taxes and IRS Penalties: 7 Little Secrets the IRS Hopes You Never Learn
  IRS Tax Relief: Seven Common Income Tax Relief Myths That Can Get You into IRS Trouble
  Tax Relief: How Successful Resolution is Defined for Taxpayers Facing Different IRS Problems
  Some Business Tax Tips for 2010
  Tax Documents you must Maintain
  How to Get Business Tax Relief from an IRS Installment Payment Plan
  7 Things Small Business Owners Should Know About Payroll Tax Problems
  IRS Penalty Abatement: Five Tips to Reduce or Eliminate Penalties From Back Taxes and Unfiled Tax Returns
  So who must file an income tax return for a given year?

Article Tags: Delinquent Tax Returns, IRS, Taxes



Related Forum Posts
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!
Re: New McDonalds McCafe concept... - You mean I can get my breakfast burritos and a great cup of coffee all at one location??? Sounds fabu!! Havent seen it yet in Port Hope (or Toronto for that matter) but I think I would try it out. I'm sick of paying $5. for a latte..... J
Re: Big congrats to GT! - Well done, GT! I knew this achievement was right around the corner. Keep on inspiring us! Kevin, nice to see you drop in. Hope things are going well for you! Have a Happy New Year, everyone!
Forum design - EvanCarmichael.com - Just wanted to say the new look forum is great! Seem a lot easier to use and more modern! Welldone Havent been here for a while, when was it updated?
Re: Moderators on vacation - Off on my Christmas holidays with my family later today! Actually, we are flying to England and have been watching BBC World News reports about Heathrow struggling to cope with the snow... Hope the trains manage to run on Christmas Eve... I probably won't appear on the forum very often until around 5th January, DV... Merry Christmas and a Happy New Year everybody! David H


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Selling with Humor (and a Sorry Butt)

••••••>SEO Tip Of The Day: HTML Validation

How to Sell to the Price Driven Customer

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.