Three Simple Steps to Take NOW if You Still Haven’t Filed Your Tax Return

You didn’t file on April 15th because you didn’t have the money to pay. You got an extension, hoping somehow it would give you time you needed to get the money to pay your tax bill.

But business hasn’t picked up. You haven’t hit the lottery. And that old grey mare, well, she’s not the one that won the Triple Crown this summer.

You still don’t have the money to pay the IRS.  Now what?

Don’t let this thing snowball.stop-863665_1280 (1)

I help rescue taxpayers in trouble with the IRS. I’ve seen all kinds of problems and all kinds of cases, and resolved some absolutely HUGE tax debts. But all that work is AFTER THE FACT. It’s re-active. It fixes problems that could have been avoided if folks did the right things earlier in the game. Problems like having the IRS freeze your bank account, or levy your paycheck, or seize your property.

Don’t run and hide. It will only make matters worse. Take this pro-active advice to keep your current tax debt from growing into a HUGE problem later;

Be double-dog sure to file your return on time.

Even if you still don’t have the money, file your return by the September 15th (business) or October 15th (individual) tax deadline. File on time even if you can’t send in one single dollar with the return to pay the tax due. It’s insane not to file and then have the IRS pile up additional interest and late filing penalties on top of the actual tax you owe.

If you can, send in at least some money now.

pennies-15727_1280Even if you don’t have enough to pay the whole amount, but have some money today, pay it now even before you file the return. Unlike other creditors, the IRS is happy to take partial payments. So go ahead and pay some NOW. You can wait until the deadline to file — that will at least delay an assessment — but pay some now. What you probably don’t realize is this: the money was actually due on April 15th anyway, even if you got an automatic extension to file.  So if you’ve got some of the tax money now, go ahead and pay some now and stop wasting money on interest and penalties you don’t have to be paying. You can pay online via IRS Direct Pay, or mail in a check to the appropriate IRS office

The next step depends on how much you owe.

Once you’ve filed, it will take the IRS a few weeks to process the return. Then they’ll send you the IRS notice you’ve been dreading, with an assessment of the amount due. At that point, it’s important to act quickly. The action you should take will depend on how much you owe.

  • Less than $10,000. If your total debt, including this year’s tax together with any prior years tax still due, totals $10,000 or less, you can set up an automatic 36 month payment agreement online. Just go to the IRS website and do so. Once it’s set up, be sure to consistently make the payments, each and every month. And know that all future tax returns and tax debt must be paid on time, which means you’ll be paying past tax debt and next year’s tax bills all at the same time. It’s double for your trouble, but do it… or you will default the agreement.
  • $10,000 – $50,000. If you owe somewhere between these amounts, you can establish a Streamlined Installment Agreement. This allows you pay the amount due over 72 months. It’s not a quick fix, obviously, but let’s face it, you didn’t create this problem overnight either. Your tax problem is most likely the result of a number of poor quality decisions made over time. The solution may take some time as well. The important thing is to get started on a program to put IRS collection actions on ‘hold’ for now and, in time, put your tax problem behind you permanently.
  • If you owe $50,000 or more, my recommendation is to contact a tax relief professional immediately to sort out your options. There are four primary IRS programs you can use to get a Fresh Start. Bankruptcy is a fifth option, though it has it’s limitations when it comes to wiping out your tax debt. The best course is to get help determining which program is best-suited to your family’s financial situation. Most professionals offer a FREE consultation to help you; take advantage of this!

ANCHOR ON THIS: If you haven’t filed because you can’t pay the tax, don’t let the problem snowball. Inaction will only make the situation worse. Make smart decisions: file on time, pay what you can today, and if you need to, make an installment agreement to pay your taxes over time. If you can’t afford a payment plan, you may qualify for other IRS Relief programs.

For more information, contact a tax professional who specializes in IRS Representation.

How Long Can I Go Without Filing a Tax Return?

Federal law sets out time limits, or statutes of limitations, for the IRS can pursue taxpayers who fail to file their tax return.

The govecalendar-151591_150rnment can only bring criminal charges against a nonfiler within 6 years of the date the tax return was due. For example, after April 15, 2014, you can’t be prosecuted for failing to file a 2007 tax return that was due on April 15, 2008.

But there is NO deadline on the IRS for going after nonfilers and imposing civil penalties, in addiition to any taxes owed. In other words, while you can’t be put in jail for not filing a 2007 tax return, you will forever owe the IRS a return, assuming you earned enough income to meet the minimum filing requirements for that year. And penalties and interest on unfiled tax returns run forever.

If I can’t pay my taxes, should I file my tax return anyway?

black-40636_150Taxpayers often hold off filing their returns when they can’t afford to pay the taxes due. Even if you expect cash flow to improve in the next 30 days or so, it’s best to not delay and go ahead and file the return right away. It’s going to take several weeks for the IRS machinery to process your return and send you a tax due notice anyway.  In the meantime, filing saves you the possibility of being criminally charged, or more likely, from being hit with a fine for failing to file, or a penalty for late filing.

Eventually, filing without paying will bring an assessment letter. And if the tax remains unpaid for an extended period of time, IRS collection activity will ensue. But an IRS collector will be friendlier if your return has been filed and he/she doesn’t have to hunt you down.

Bottom line, the sooner you file, the better.  Not filing won’t make a potential IRS problem disappear. Man up, file the return!