Why Should I File Back Taxes?
- September 16, 2019
- Posted by: Platinum Tax defenders
- Category: Tax Resolution
Indeed, the IRS will not prosecute those who voluntarily filing back taxes. However, that’s not the case for taxpayers whom the IRS comes after for back tax payments. If you don’t file back taxes yourself, the IRS can file a return on your behalf. When the IRS files a return on your behalf, it typically leads to a higher than usual tax liability. Additionally, if you continue to fail to file, you can face criminal prosecution.
Even if you don’t owe taxes and you don’t file, the IRS can claim past refunds. If you don’t file a tax return, the IRS will gladly keep the money they owe you. Failure to file or pay back taxes can result in a misdemeanor charge with penalties of up to one year in prison. Fines for failing to pay or file back taxes can be up to $100,000 for individuals.
Top Reasons to File Back Taxes
It’s critical to stay on top of your taxes and file back taxes even if they’re late. If the IRS accuses you of tax evasion, you can face up to five years in prison. Additionally, tax evasion can lead to fines of $250,000 for individuals. The IRS allows you to file back taxes from decades ago as long as you have the right documents. Therefore, there’s no reason why you should not file back taxes. Read on for top reasons to file back taxes.
Consequences Are Less Severe For Filing Back Taxes Voluntarily
You can face less severe consequences if you file back taxes voluntarily. However, if the IRS finds you first, the consequences can be more severe.
Payment Plan Options Are Available To Those Who Voluntarily File
If you file back taxes and learn you owe the IRS money, you may be able to negotiate a payment plan. The sooner you file back taxes and try to settle back taxes, the fewer penalties and interest will be.
You May Be Eligible for A Refund
If you find you don’t owe any taxes to the IRS after filing back taxes, you may get a refund. However, you must file back taxes to receive that refund. The IRS only allows taxpayers to collect refunds if they file within three years of the due date.
You Can Save On Penalties and Interest
If you owe taxes and do not file, penalties and interest will continue to grow. As penalties and interest add up, it makes your overall tax debt balance more significant. The more taxes you owe, the harder it will be to settle back taxes.
The IRS May File For You
If you don’t file back taxes, the IRS may file for you. The form the IRS uses is a Substitute for Return. This substitute return can span multiple years, and the IRS doesn’t place any federal exemptions or expenses. If the IRS files your taxes for you, they will likely overstate the total amount you owe.
The IRS Will Begin Collection Actions
Once the IRS submits the substitute return for you, it can begin collection activity. Some of the tactics the IRS may use to collect its money include:
- Bank levies
- Wage garnishments
- Tax liens
You Still Must File Even If The IRS Files For You
Even if the IRS submits a substitute for you, you should still file back taxes. Filing back taxes can reduce how much you owe.
A Tax Lien Can Affect Your Credit Report
If the IRS places a tax lien on your account, it can appear on your credit report. With a tax lien on your credit report, it can be harder to get car loans or mortgages.
The IRS Won’t Approve Tax Resolution Requests
If you don’t file back taxes, the IRS will not approve tax resolution plans until you file old tax returns. Tax relief programs the IRS will not approve:
- Offer in Compromise
- Installment Agreement
- Alternatively, multiple other arrangements to settle current tax debt
Have Peace of Mind That You’re In Good IRS Standing
If you file back taxes, you enjoy having peace of mind that your tax problems are gone. You will not have to worry about what the IRS will do to collect your back taxes.
Tips To Successfully File back Taxes
When you file back taxes, it’s essential that you do not delay. The longer you wait to file, the worse your penalties will be. It’s important to remember that it’s never too late to file back taxes. Hiring a tax relief specialist can help you to file back taxes and reduce your back taxes. You typically end up saving money by hiring a tax resolution specialist. Tax relief specialists deal with clients who need to file back taxes every day. A tax resolution professional likely has experience handling many situations just like yours. Tax professionals know how to negotiate with the IRS successfully. If you don’t have money to settle back taxes, it’s especially important to consult a tax relief specialist.
Call Platinum Tax Defenders for Help Filing Back Taxes
If you need help filing back taxes, call the professionals at Platinum Tax Defenders. Our team of CPAs, tax attorneys, and enrolled agents can help you get in good standing with the IRS. We help clients file back taxes every day. Our team knows what forms you need to file back taxes.
Additionally, we can help you ensure you don’t end up with a significant tax bill. If you do owe the IRS more than you can afford, we can help you with tax relief solutions. Our team has experience achieving effective tax relief solutions for our clients. Don’t wait to file back taxes until it’s too late. Call Platinum Tax Defenders today for a free consultation. File your back taxes before the IRS files them for you.