Failed To File Your Tax Returns? Here Is What Will Happen Now

Income Tax Preparation Denver is confusing for a lot of people. People make a lot of effort to file their taxes on time each year. But there are some who miss the deadline and some who don’t bother to file it. Now you must be wondering what will happen if you don’t file taxes on time. or don’t do it at all. Can you ignore the fact that you haven’t filed returns and can file them next year? Or do you think the IRS will just ignore you and move onto the next person? 

 Penalties

The first thing you need to be concerned about is a failure-to-pay penalty. This is usually around 5% of unpaid taxes each month you don’t pay, till five months. According to the IRS, “If you file more than 60 days late, you’ll pay whatever is less: a minimum of 100% of the taxes you owe or “a specific dollar amount that is adjusted annually for inflation.” The only time that you don’t have to pay a penalty is when you owe the IRS no tax or a situation where you are owed a refund. In the case of a refund, you have three years’ time to file them, failing which the IRS gets to keep it.

Another situation is where you file your taxes but don’t pay them. This will make the IRS file a failure-to-pay charge on you. This is usually 0.5% of the unpaid taxes for each unpaid month, going up to 25%. There is a big difference between failure-to-pay and failure-to-file. It is worth noting that it is always better to file your taxes than not do it at all.

What Can The IRS Do In The Worst-Case Scenario?

Make sure you don’t forget to file your taxes as there are scenarios where you can face a lot of hardships. If you fail to pay the fines continuously and have not filed for an extension, the IRS can file further charges depending on a case-to-case basis. These can include:

• Federal tax lien – This is when the government can file a claim on your property
• Property Seizure – The government can seize your property against your tax bill
• Tax Evasion Charges – This can include significant jail time
• Forfeit Refund – Any refund that you are owed can be forfeited if not claimed within three years

Keep the process easy and hire us at Denver Tax Accounting Firm – Fast Action Taxes. We can help you file on time and make sure it is done correctly.