Not filing your taxes on time for several years might have serious repercussions. Besides keeping you from applying for a passport, IRS can create a Substitute for Return, charge you with failure to file or failure to pay. Before you start panicking, let’s take a look at options you have to avoid the worst of punishment.
Wondering how the IRS works and knows the due amount? When you don’t file for a long time, IRS files a Substitute for Return, SFR for short, on your behalf. After that, you receive a notice to accept that debt amount as filed in the given form. If there’s no response from your end, the IRS issues a Deficiency notice. This begins the tax collection process by the agency.
Few things that you must know as per William D King if you fail to pay the taxes-
Consequences of Not Filing for Years
You may need to show tax returns for the following – Application for the passport, a mortgage, student financial aid, healthcare insurance, social security retirement, and more. In other words, you have to show tax returns during a variety of financial dealings for the documentation work. When you don’t file, you don’t get a passport, loan, disability benefits, etc. Also, the IRS might charge you with failure to pay and failure to file. Each of them contains heavy penalties. And, the worst thing is you could go to prison for as long as five years for tax evasion or pay the fine worth $250,000.
How to rectify the situation?
When you want to get out of this situation, get prepared to file all of your returns. For this,
● Gather all financial records that are needed for each return. In case you can’t find something, connect with the IRS for a copy.
● Prepare your return either by yourself or seek assistance from a professional.
● Wait for the federal government to tell you how much you owe them. Refiling the taxes will supersede SFRs filed by the IRS.
Penalties, Fees, and Back Taxes
Not only would you have to pay the taxes but also the penalties. When you fail to file taxes, you’ve to pay the penalties, commonly known as back taxes says William D King. Additionally, you have to pay 3% interest that the IRS charges over the amount you owe for each year that you have not paid.
When you’re unsure of the process to file back taxes, it’s recommended to take back tax advice from professionals. They assist you throughout the procedure to relieve you from the pile of money that you owe. Well, getting into trouble could make your life hell, and you need a professional who can guide you to make the right decisions at the right time. So, without wasting any more time, start looking for the best tax experts available online. Do your research well before you approach them.
Not filing your taxes on time for several years might have serious repercussions. Besides keeping you from applying for a passport, IRS can create a Substitute for Return, charge you with failure to file or failure to pay. Before you start panicking, let’s take a look at options you have to avoid the worst of punishment.
Wondering how the IRS works and knows the due amount? When you don’t file for a long time, IRS files a Substitute for Return, SFR for short, on your behalf. After that, you receive a notice to accept that debt amount as filed in the given form. If there’s no response from your end, the IRS issues a Deficiency notice. This begins the tax collection process by the agency.
Few things that you must know as per William D King if you fail to pay the taxes-
Consequences of Not Filing for Years
You may need to show tax returns for the following – Application for the passport, a mortgage, student financial aid, healthcare insurance, social security retirement, and more. In other words, you have to show tax returns during a variety of financial dealings for the documentation work. When you don’t file, you don’t get a passport, loan, disability benefits, etc. Also, the IRS might charge you with failure to pay and failure to file. Each of them contains heavy penalties. And, the worst thing is you could go to prison for as long as five years for tax evasion or pay the fine worth $250,000.
How to rectify the situation?
When you want to get out of this situation, get prepared to file all of your returns. For this,
● Gather all financial records that are needed for each return. In case you can’t find something, connect with the IRS for a copy.
● Prepare your return either by yourself or seek assistance from a professional.
● Wait for the federal government to tell you how much you owe them. Refiling the taxes will supersede SFRs filed by the IRS.
Penalties, Fees, and Back Taxes
Not only would you have to pay the taxes but also the penalties. When you fail to file taxes, you’ve to pay the penalties, commonly known as back taxes says William D King. Additionally, you have to pay 3% interest that the IRS charges over the amount you owe for each year that you have not paid.
When you’re unsure of the process to file back taxes, it’s recommended to take back tax advice from professionals. They assist you throughout the procedure to relieve you from the pile of money that you owe. Well, getting into trouble could make your life hell, and you need a professional who can guide you to make the right decisions at the right time. So, without wasting any more time, start looking for the best tax experts available online. Do your research well before you approach them.