27 Mar What to Do if You Haven’t Filed Taxes in Years
Many people can end up not paying their taxes for years; it’s a common occurrence when you’re having money problems.
If the same thing applies to you, it would be good to read this article as we’ll talk about what you can do if you find yourself in such a difficult spot.
Filing and Paying Taxes
Not paying taxes is usually connected to not filing them at all. Yes, these two are different, and many people do submit their tax report but end up not paying what they owe.
If you haven’t filed tax returns, you can still receive any amount you were owed. However, there’s a specific timeframe that you must respect. All refunds not claimed in more than three years cannot be collected anymore. So, it’s essential for you to declare what you can as soon as possible.
In the case you owe and don’t pay, different problems can occur.
Consequences of Not Paying Taxes
Not paying your taxes equals a misdemeanor and that means that if you failed to pay, you would end up fined $25,000 for each year you haven’t remitted what you owed.
Additionally, the IRS charges interest as well. You can see the details on all of this on their site.
Whenever you miss a payment, the IRS will send you a letter. If you don’t do what they request, you can get into problems with them. They can freeze your accounts and even put a lien on your home. The worst thing about this is that they can do this at any point if they have a reason. There’s no time limit on how long they can wait to go after you.
In some rare instances, the IRS can even pursue jail time which can last up to a year at the most. Thankfully, this rarely happens as the IRS would rather see you pay what you owe them than not pay at all.
What Can You Do When You Haven’t Filed in Years
The best thing that you can do is get the IRS to waive the penalties, but you will still have to remit what you owe. Because the sanctions amount to $25,000 per year, it’s certainly beneficial to obtain such treatment.
For them to forgive the penalties, you have to prove that you had reasonable cause for not paying your taxes.
There are plenty of specific instances that are viewed as a reasonable cause by the IRS, like:
- Death of a family member or some other close person
- Certain civil situations such as a divorce disabling you from paying your taxes
- Your unavoidable absence like rehab, prison, and more
All in all, there are plenty of ways of proving that you were unable to pay your taxes. If you would like to know more or you need help in dealing with the IRS, feel free to contact us. We at Golden Tax Relief specialize in helping you deal with the IRS. We make it our job to know how the tax system works and how you can work out any problems you have with the IRS.