It’s all about action NOW – It’s reported by the IRS that nearly 10 million taxpayers fail to file their taxes each year. Reasons vary from forgetfulness to deliberate avoidance and many people are afraid to contact the IRS to fix the problem. However, it’s very important to get the situation fixed as soon as possible. It’s really not likely that you’ll go to prison for the missed filing, but unfortunately you could be looking at a heavy fines and penalizations.
On the other hand, there technically is no penalty for forgetting to file if you’re owed a refund. For those who owe money, the IRS will gladly set up an installment payment plan, which is an agreement that allows gradual settlement of the past due balance. No matter what the situation, it’s past time to fix the problem.
How do I get started filing late? – Past due taxes are prepared in the same manner as present day returns, so gather up all pertinent information such as pay stubs, W-2 forms and investment records. Next, check to see if there are any filing requirements. According to the IRS, “Whether or not you must file a tax return will depend upon a number of factors, including your filing status, age and gross income. Individuals who are entitled to the Earned Income Tax Credit must file their return to claim the credit even if they are not otherwise required to file.” Next, get the proper tax forms dated for the year for which you are filing. Lastly, prepare the return and send it in. The best thing to do is pay the past liability in full. If that’s not an option, look into IRS payment installments.
Installment Payment Types – These days, the IRS allows taxpayers to apply for installment plans online or by mail. Those owing $25,000 or less in taxes can go to the installment website or fill out form 9465; Request for Installment Agreement. Past due accounts of more than $25,000 require form 433F; Collection Information Statement along with form 9465. With that much liability, there will probably be a need to negotiate with the IRS directly. In this case, it’s best to get the help of a tax lawyer or accountant.
What If I Do Nothing? – The answer to this question is nothing, yet. According to the Tax Facts blog, “The IRS has a sophisticated computer system to help them catch those taxpayers who have not filed.” Once they do, they’ll compile their own return for you, minus many useful deductions and will place liens on bank accounts and property until it’s paid. There’s also the prospect of credit score ruination.
All in all, it’s a lot less painful to simply contact the IRS and deal with past due taxes. The government simply wants late taxpayers to make a formal effort and will attempt to meet you halfway in a mutually beneficial fashion. If in doubt, contact a trusted tax accountant for help with settling all of this up. Sometimes it’s best to not go it alone in these situations.
For more information on what you can do if you didn’t file your taxes yet this year, then speak with a Beaton Accounting tax representative for professional advice on how to handle this situation! Call today for a FREE consultation: 631-921-6894.
Have a question or certain topic you’d like to see addressed in our next blog post? Just leave a comment, or e-mail us at info@beatonaccounting.com.