Is This Your Situation:  Panicking Because You Haven't Filed Your Taxes in Years 


The very thought of April 15 strikes fear in your heart — so you've ignored it for years. What can really happen to you if you've neglected to participate in the great equalizer known as filing a tax return?

 

First, let's look at the less serious of the two possible outcomes — you are entitled to a refund. If this is the case, you do not owe any penalties or interest, but if your return reaches the IRS three years past the due date, you will lose your refund. That's right, your money's all gone. Consider it a penalty of sorts!
 

Now let's look at what happens if you owe:

 

1.  Expect steep penalties. You may be subject to the failure to file penalty, unless you have reasonable cause for not filing on time. If you didn't pay your taxes in full by the original due date, you may also be subject to interest on taxes not paid, even if you received an extension. Interest is also charged on penalties.
 

2.  You won't be able to get a loan. Want to buy a house or car? If you don't have tax returns to show, you won't get a loan for either, or for pretty much anything else.
 

3.  The IRS can file a substitute return. And if they do, they'll file for you as a single individual with only one exemption. If this happens, you should still file your own return so you can take advantage of any exemptions, credits and deductions you're entitled to.
 

4.  You could go to jail. It's not likely because, technically, failure to pay past-due taxes is a misdemeanor. But you can be fined up to $25,000 for each delinquent year, on top of what you owe, and possibly go to prison for a maximum of one year. But the IRS is more interested in your money than in putting you in jail.
 

It's never good to not file your tax returns, but don't lose hope. There is help — you just have to know where to find it. That's what we're here for. Contact us. We'll get you out of the bind, see what amnesty programs you may be eligible for, then set you on a better path.

 

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