There are various reasons why a Taxpayer might not timely file a Tax Return.
If you don’t file on time and you owe money to IRS, you will find yourself paying more than merely tax. IRS charges penalties and interest associated with Not Filing and Not Paying on Time. The Failure to File Penalty is immediately greater than the Failure to Pay Penalty. Taxpayers ought to consider that even if they can’t pay, they should timely file their Returns to initially minimize their penalties and interest.
They have up to 3 years from a timely filed Tax Return due date to claim refunds, or risk losing them. Taxpayers can lose their refund right if they do not timely file their Tax Returns.
A self-employed Taxpayer will not receive credit towards Social Security, retirement or disability benefits until his Tax Return is filed. IRS can also delay issuing a Taxpayer’s current year’s refund if the Taxpayer has not filed a Tax Return for a previous year.
If the Taxpayer does not file a Return, IRS might file a Substitute for Return (SFR) for the Taxpayer. The SFR prepared by IRS may not include all exemptions, credits or deductions to which the Taxpayer might be entitled. So, if IRS prepares a SFR, the Taxpayer could end up with a larger tax liability than if the Taxpayer had self-prepared the Return.
If a SFR results in taxes owed, the Taxpayer will receive a notice from IRS that will include an amount of tax due, a Failure to File Penalty, a Failure to Pay Penalty and interest. Although a Taxpayer has the right to contest the amount in the SFR notice, the Taxpayer must file a Tax Return with IRS in order to do so.
Don’t be a victim of your own making. If you haven’t filed your Tax Return, contact your Tax Specialist immediately.