An unfiled tax return typically leads to bigger problems and can put a greater strain on the taxpayer’s troubled financial condition. The consequences of filing voluntarily, and not being able to pay your taxes, are much less severe than having the IRS file back taxes on your behalf. The government’s substitute tax return does not include provisions for the deductible expenses and exemptions that are allowed on your individual tax filings. Therefore, your total tax liability will likely increase and you will have little recourse and few remedies. In addition, the IRS will push to force the collection of the debt. Since the IRS doesn’t really care about your ability to pay your other bills, it is always a good idea to seek tax settlement solutions from an enrolled agent, tax professional or other certified tax consultant for timely resolution. If you think your money may be on the line, act fast and call Stern & Associates at (415) 668-3130 today for a free consultation.
Don’t be fooled by the fact that the IRS moves slowly at times. They have a computerized system of checks and balances that will eventually red flag your tax delinquencies. Once you have been identified as having unfiled tax returns, you may receive:
- Notices of Unfiled Returns – Once the IRS identifies your unfiled tax returns, you will start to receive a series of automated letters notifying you of their intent to collect back taxes. You should seek professional advice as to the meaning of each letter.
- IRS Interest & Penalties – If you are caught avoiding your tax debt, the IRS will begin charging interest on the balance of the unpaid tax debt as well as attaching penalties for payments that you failed to make in a timely manner.
- Tax Levy – When the IRS completes an unfiled tax return on your behalf, they can also place a hold on your personal banking accounts for checking and/or savings until any money owed is paid. A bank levy can occur before you are notified of the freeze placed on your funds.
- Wage Garnishment – One of the most common forms of levy used by the IRS for the collection of delinquent taxes is to place a garnishment against your wages. Your employer can be made to withhold and submit payments directly to the IRS.
- Property Tax Lien – The IRS can also place a Federal tax lien against your personal property and force you to pay back taxes owed from unfiled tax returns. A tax lien significantly hurts the taxpayer’s ability to obtain any other type of loan or credit approval.
If you were paid on a W-2 form by your employer, a pro-rated portion of your income taxes were withheld and submitted to the IRS by the company during the tax year. The same is true if you were self-employed or paid on form 1099 as an independent contractor. The paper trail is there and your back taxes will likely be identified. Even when you don’t have the money to pay your tax debt right away, it is always important to file your back taxes. That way, you will be considered to be in good standing with the Internal Revenue Service and will have some options to negotiate a tax settlement agreement for IRS tax relief. For immediate help with your unfiled tax returns, call Stern & Associates at (415) 668-3130 to discuss the best tax settlement solution with an enrolled agent today. If you prefer a private email, please use our website’s convenient Contact Us form for a prompt response to questions regarding your unfiled tax returns.