Ever wonder what happens if you forget to file taxes? If you requested a filing extension, you’ll have until October 15 to get your forms submitted. Without an extension, however, you are essentially waiting for the IRS to catch up with you. Not only is this very stressful, but it also places you in a position where you could be facing serious consequences.
Reasons Why People Forget to File Taxes
Each year, millions of taxpayers neglect to submit their tax returns on time. Many admit to being lazy or absent-minded, but there are also a plethora of other reasons why people forget to file their taxes. These include:
- Serious Illness
- Death of a Family Member
- Bad Advice From a Legal Professional
- Income Taxes Are “Voluntary”
- Military Service Exemption
- Incarceration
- Missing Documentation
- IRS Was Unresponsive
Although these may be legitimate reasons for not filing your taxes on time, the IRS will not except excuses at face value. In order to avoid potential fines and penalties, you will need ample documentation to back up your claims. Be sure to keep receipts, intake forms, letters, emails, and anything else that can substantiate your reason for failing to file on time.
Consequences of Not Filing Your Taxes
The IRS understands that everyone makes mistakes, but they will not patiently wait forever for you to submit your tax return, especially if you owe them money. Take a look at some of the consequences you could face if you continue to put off filing your return.
Even if you owe taxes and can’t pay, it’s important to file your tax return as soon as possible. Why? You’ll only be charged .5% of the balanced owed for each month that you don’t pay your taxes versus the 5% monthly fee you will be assessed for not submitting your forms.
How to Handle Unfiled Taxes
If you forgot to file a tax return this year (or for previous years), don’t panic. You still have options.
File ASAP
When it comes to late returns, don’t procrastinate and keep putting it off. If you owe the IRS money, your bill will continue to grow every day you delay. Submit your tax return as soon as possible to keep penalties and interest to a minimum.
Request Penalty Abatement
Is this the first time that you missed the filing deadline? There’s a good chance that you will qualify for penalty abatement. If you have a valid reason for not submitting your forms on time, the IRS may waive the fines and penalties assessed to your late return.
Get Into a Payment Plan
Many taxpayers don’t file their taxes because they owe the IRS money and can’t pay. If this is why you have put off filing your tax return, an installment agreement could be the answer. The IRS offers short-term and long-term payment plans to help those who are unable to pay their taxes in full. Getting into a payment plan will also help you avoid additional IRS collection actions, such as wage garnishment and tax liens.
See If You Qualify for Tax Relief
This year has been a struggle for many taxpayers. Fortunately, the IRS offers several tax relief programs to help those who can’t pay their taxes. Depending on your situation, you may be able to settle your tax debt for less (Offer in Compromise) or be placed in a Currently Not Collectible status (CNC). If granted CNC status, no payments will be due until your financial situation improves.
It can be scary knowing that you have unfiled tax returns. But instead of waiting for the IRS to take action against you, contact the tax professionals at Tax Defense Network. We can help you get caught up on late returns and ensure you get the best outcome possible. To learn more about our services and fees, schedule a free consultation today!