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Will Chicago Businesses And Individuals Get Away With Having Unfiled Income Tax Returns?
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Quite a great number of tax payers in the US with unfiled income tax returns. Some people might believethat if youoverlook the issue, it can just go away while other people are regularly stressed out over the situation. Some people think that if you go ahead and file their returns after some time of haing not filed, it will cause a red flag with the IRS. While a number of might get by with not filing income tax returns for numerous years, there are others who think they could fly below the radar only to get caught by the Internal revenue service only to owe high penalties and interest that could have potentially been avoided.
There are many reasons people choose not to file their taxes including: worries of owing taxes, having to pay the taxes, financial problems, distraction from a death in the family, inability to track down tax records, too busy, cannot afforda qualified tax professional or fear of being prosecuted for not filing. But one unfiled tax return can turn into several and before you know it the returns have piled up after many years making it more difficult to catch up.
What some taxpayers don't know it that the internal revenue service already has most of their information and knows whether you should file taxes or not. For those who have ever received W2, 1099s, 1098s, have a business or got large deposits above $10,000.00 in your bank account, the IRS has that information. Should you have a refund coming back or owe nothing, they actually could not bother filing the return. But for taxpayers that do owe money, the internal revenue service often chooses to file the return without deductions you may otherwise qualify for if you filed your own return. This might generate fines and interest that are huge and can increase your liability depending upon how much time has passed by since the tax due date. What's worse is that theIRSnow has a cause to garnish wages, levy bank accounts and additional assets if you choose to overlook their notices for payment. If you have moved and you choose to file your return, you may not realize there is a garnishment or levy in place until your bank or place of employmentgets a notice.
There has beena number of very fortunatepeople to get away with having unfiled tax returns in Chicago and all over the United States but the IRS eventually catch up to most people. The cost and consequences is just not worth it. There will also come a period when you can need your tax records for individual or business transactions or even to file bankruptcy. You will also have to get your taxes filed and up to date if you may need to work out a payment arrangement with the IRS or negotiate an Offer In Compromise to settle your tax debt. If your incomeis being garnished you must get up to date on all prior year income tax returns before an arrangement can be made with the IRS to stop the wage garnishment.
The bad news about having unfiled tax returns is that many tax payers are actually due a refund before all the fines and interest is added but you lose the chance to collect the refund after three years from the date the return was due. If you cooperate with the Internal revenue service and file your own returns, you have a better chance of working with them on a solution to resolve the matter. If you don't want to deal with the IRS alone, hire a tax professional who specialize in Internal revenue service tax problems to communicate with the internal revenue service file your taxes and get you compliant. If you have lost tax documents, don't panic. Your recordscan be obtainedin as little as one day by giving authorization to a skilled tax professional who is registered with the IRS to receive this information on behalf of the taxpayer. If you own your own business and don't have your documents, it is recommended by the Internal revenue service to use the industry standard to file your returns.
If you received a tax bill from the Internal revenue service because they filed a substitute return for you, you are permitted to file your own returns and add the missing deductions you could quality for. You may end up getting refund or you can end up with a tax liability along with penalties and interest. Depending on your circumstances, you can be able to work out a payment arrangement, apply for penalty abatement or settle the debt with the IRS for a lower dollar about. But you should always file your return even if you suspect that there will be a large tax liability due. If fear of going to jail if you can't afford to pay is your reason for not filing, you are getting yourself into deeper trouble with the internal revenue service. Though you won't go to jail for having tax debtthat you can't afford, there is a possibility that you could land in jail for tax evasion. So it is always better to file your taxes no matter what you end up owing as a result.
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