Consequences of Unfiled Tax Returns

Benjamin Franklin once said, “'In this world nothing can be said to be certain, except death and taxes."  So, what happens if you have a delinquent tax return or you owe back taxes?  You can be certain that the Internal Revenue Service (IRS) will find you and that the potential consequences may be severe. 

Penalties for Not Filing Tax Returns

If you have a delinquent tax return then you need to be aware of the following potential consequences of not filing tax returns, such as:

• Penalties and Interest: incurred in addition to the amount that you owe in back taxes;
• Wage Garnishments: the IRS may garnish your wages to satisfy your tax debt;
• Other Garnishments: on bank accounts and property are also possible; and
• Criminal Prosecution: the IRS may initiate a criminal prosecution against a taxpayer who doesn’t file a tax return.

Avoiding Penalties and Resolving Unfiled Taxes

In order to avoid these potential consequences it is important that you take care of your delinquent taxes by:

• Filing your delinquent tax return immediately and paying in full;
• Filing your delinquent tax return immediately and paying as much as possible and paying the rest, including penalties and interest, through monthly installments;
• Requesting a Temporary Delay which may stall the government’s collection efforts;  or
• Making an Offer in Compromise for less than the full amount owed.  Generally, the IRS will only approve an offer in compromise if one of the following three elements is present in your case: (1) the IRS has doubt about the collectability of your tax liability; (2)there is legitimate doubt about your tax liability; or (3) an exceptional circumstance exists that would make collection of the tax unfair or inequitable.

Attorneys for Unfiled Tax Returns?

The best way to avoid the significant consequences of back taxes such as wage garnishments and criminal prosecution is to hire an experienced tax lawyer who can advise you about the best option available to you to deal with your overdue taxes.