Millions of people let their taxes go unfiled every year, and the longer that the situation goes on, the more unsure they get about their predicament. They may ask themselves if it’s better to just never file again if the IRS won’t notice or if something’s going to happen if they do start filing now.
Here’s a comprehensive guide on the consequences of unfiled tax returns and how you can deal with them:
Any year that you have a filing requirement, the law requires you to fulfill your duty. If you fail to file your return, the government can charge you with civil or criminal penalties.
There’s a large penalty for filing your taxes late — with a 5% fee on each of the first 5 months’ taxes going up to a total of 25% of your total tax bill. You’ll also be charged interest by the IRS until you’re able to pay off the balance.
If you file your returns too late, you might lose any refund that you were supposed to get with it. File your return within 3 years of the date that it was due in order to get access to your refund.
You could get audited by the IRS
The IRS evaluates back tax returns in the same way as all other returns. However, if you don’t file for a handful of years and suddenly file a large return with a huge amount of income from self-employment, it could cause the IRS to open an audit due to the red flags.
There are increased chances of getting audited if you leave off income that has already been reported to the IRS, making it important to prepare your back tax returns properly.
Professional tax attorney in Baltimore County
Navigating tax laws is difficult without an in-depth understanding of finance and taxation. However, an IRS audit lawyer can advocate for your rights and take care of all the legalities. If your unfiled taxes lead you to get called into court, you may need to hire the services of both a criminal defense lawyer and a tax lawyer to protect you.
At Lincoln Law Group, you can find a diverse team of legal professionals in Silver Spring, including tax attorneys, criminal defense attorneys, family law attorneys, immigration lawyers, and personal injury lawyers in Baltimore and Silver Spring.
Reach out to us to find out more about their services.