All of us procrastinate. But some take things to dangerous extremes – putting off the filing of tax returns for a few years, or even many years. According to the IRS, each year some ten million people fail to file their tax returns. Non-filers, as the IRS calls them, are skating on thin ice. They face both criminal and civil consequences. Luckily, these problems can be resolved if addressed, but they can also bring imprisonment and financial ruin if ignored.
The IRS has become increasingly adept at finding and pursuing non-filers. Put simply, it’s not a matter of “if” the IRS will find you, but what will happen to you “when” they do. It is important to recognize that inability to pay the tax is NOT a valid excuse for not filing.
Failure to file your tax return timely has two potential consequences. First, the government can prosecute you for willful failure to file (a misdemeanor carrying a maximum sentence of one year in prison for each tax year) or for tax evasion (a felony carrying a maximum sentence of five years in prison for each tax year). Second, the IRS can make tax assessments on its own using its “substitute for return” procedures.
With respect to tax prosecution, people are prosecuted for failure to file or for tax evasion not because it is the easiest or cheapest way for the IRS to collect the tax. Instead, people are prosecuted because of the deterrent effect it has on the rest of the taxpaying public. For those poor souls who become ensnared in this process, it can destroy families and careers. Proper representation is an absolute necessity.
With respect to tax assessments, failure to file your tax return timely may lead to the imposition of a penalty that increases each month that the return is late. The late filing penalty is 5% of the amount of the tax that should otherwise have been reported on the return for each month (or fraction of a month) that the return is late. This penalty is capped at 25% of your tax liability. For taxpayers who are more than 60 days late in filing a return, the late filing penalty cannot be less than $100 or the amount required to be shown on the return, whichever is less.
In the event that the taxpayer’s failure to file is attributable to fraud, the penalty rate increases from 5% to 15% per month, up to a maximum of 75%.
What does all of this mean? Don’t wait any longer! Call a tax professional today!
In accordance with Circular 230 Disclosure
As a former public defender, Michael has defended the poor, the forgotten, and the damned against a gov. that has seemingly unlimited resources to investigate and prosecute crimes. He has spent the last six years cutting his teeth on some of the most serious felony cases, obtaining favorable results for his clients. He knows what it’s like to go toe to toe with the government. In an adversarial environment that is akin to trench warfare, Michael has developed a reputation as a fearless litigator.
Michael graduated from the Thomas M. Cooley Law School. He then earned his LLM in International Tax. Michael’s unique background in tax law puts him into an elite category of criminal defense attorneys who specialize in criminal tax defense. His extensive trial experience and solid grounding in all major areas of taxation make him uniquely qualified to handle any white-collar case.
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