Unfiled Tax Returns lawyer Hanover, MD
Procrastination: It is something we all do at one time or another. Some people take procrastination to the extreme, putting themselves in risky situations. Those who delay or fail to file tax returns are no exception – especially if it goes on for years. While millions of people fail to timely file their taxes, those with unfiled tax returns – known by the Internal Revenue Service as “Non-Filers” – face both civil and criminal consequences. These repercussions can be worked through and resolved, if addressed proactively. However, if unfiled tax returns go ignored or, worse yet, more delinquencies occur, the chances for financial ruin and both civil and criminal penalties, including incarceration, will escalate. Crepeau Mourges has handled many matters involving Non-Filers in the past. We understand compliance requirements, compliance programs, and can navigate the path to address both federal and state tax issues. Our experience can help you to put these problems behind you, put an end to unwanted stress, and minimize the financial effects in the process.
Many taxpayers put off their tax filings because they either cannot pay, they believe their tax return is too complicated, or they think a filing will only trigger an audit of prior unfiled returns. None of these are good reasons to procrastinate or avoid addressing tax requirements. For starters, the most significant penalties typically accrue for filing to timely file a tax return – not for failure to pay. Many taxpayers needlessly add 25% or more in penalties as a result, at a rate of 5% per month. (In the most egregious cases, this penalty can be applied at up to 75% of the assessed tax.) And the Internal Revenue Service and state agencies are more willing than ever to provide accommodating payment options, such as installment agreements, Offers in Compromise, and others.
And while some taxpayers may have complicated issues on their tax returns, these challenges are not insurmountable. With proper guidance, a tax return can be completed and prepared. Even if records are not in order, Crepeau Mourges can assist to prepare a tax return reflecting a reasonable reconstruction of income and expense items that complies with tax laws and regulations. The Internal Revenue Service even has beneficial administrative policies that allow taxpayers to typically file only a limited number of returns to achieve compliance.
Finally, the filing of a tax return will almost never – on its own – result in the examination of prior returns, whether filed or not. Instead, the taxing authorities have become more adroit at using technology and data mining to examine and pursue non-filers. In a best-case scenario, the Internal Revenue Service will conduct an audit and will prepare a “Substitute for Return” based on available information that will likely overstate taxable income and eliminate deductions. Without providing a return or responding, the Internal Revenue Service has wide latitude to make an assessment – the basis for many is unreasonable and substantially inflates tax. Thereafter, it will apply all applicable penalties and will try to collect on the assessment by filing notices of tax lien, by serving levies, and by garnishing wages and Social Security payments. Reactively addressing these issues, whether in defense of an audit, in an administrative appeal, or in tax litigation, will only cost more to resolve.
In a worst-case scenario, continuing non-filing will lead not only to the assessment of significant taxes and penalties, but also criminal charges for willful failure to file or tax evasion. Tax evasion is a felony that carries a hefty fine and up to 5 years of incarceration. Aside from the substantial cost of defending and litigating a criminal tax prosecution, the Internal Revenue Service will follow suit and frequently conduct a lengthy audit. Taxpayers in this situation face a double-whammy and can be put in financial despair or bankrupted. (However, in many of these cases, bankruptcy will not discharge the tax liabilities either.)
If you are concerned about unfiled tax returns, unpaid taxes, or cannot deal with a lingering tax issue, you should contact the experienced attorneys at Crepeau Mourges. We can help to put your problem into perspective and get you on track to resolving your tax issues. Don’t go it alone or wait another day to deal with this problem.