IRS Tax Relief - Unfiled Tax Returns


You missed the tax deadline April 15th, so now what?

Although the IRS has received a record number of tax returns this year, there are still millions of people and business owners who did not file tax returns by April 15th. The reasons for this are numerous, but the IRS research shows that often people do not file their tax returns in years that their status changes, for instance, the death of a spouse or a divorce. 

IRS Tax Relief - Unfiled Tax Returns

Emotional or financial hardship reasons may also cause a person not to file. And then there are some folks who have simply procrastinated. Whatever your reason is, if you did not file your tax returns by April 15th, you should stop putting it off and file your tax returns as soon as possible - even if you are late.

The reasons to file your tax returns are compelling, and often less painful than ignoring your obligation.

Here are some things you should consider:
  1. You could lose your refund. There is no penalty for failure to file if you are due a refund; however, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. In cases where a tax return is not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a tax refund.
  2. You won’t receive your Earned Income Tax Credit (EITC). Even if you are not otherwise required to file a tax return, you must file in order to receive this credit. The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.
  3. A statute of limitations applies to tax refunds and tax credits. After the expiration of the refund statute, not only does the law prevent the issuance of a refund check, it also prevents the application of any credits, including overpayment of estimated or withholding taxes, to other tax years that are underpaid. It is also worth noting that the statute of limitations for the IRS to assess and collect any outstanding balance does not begin until a return has been filed. Or put another way, there is no statute of limitations for assessing and collecting the tax if no return has been filed.
  4. A “Failure to File” penalty may be assessed when you miss the tax filing deadline; the sooner you file, the more likely you are to be able to negotiate or decrease this penalty.

Regardless of your reason for not filing, file your tax return as soon as possible. You can contact a tax professional or the IRS for help with filing delinquent returns. I personally specialize in helping individuals and businesses who are unable to fully pay their taxes, either back taxes or due to the current or late filing. If you can not pay your taxes, do not let this prevent you from filing as tax settlement options may be available. For more details contact us as quick as possible.

IRS Tax Relief - Unfiled Tax Returns

The IRS has a "mechanism" for those who do not file their tax returns. This "mechanism" is called a "Substitute for Return". This filing is not a tax return. A Substitute for Return takes your reported income and gives a taxpayer no deductions while placing the taxpayer in the highest tax bracket. 

 Substitute for Return will add crushing "failure to file penalties" as well. The IRS can now enforce collection on this inflated tax debt.

The good news is the IRS tax relief team at Flat Fee Tax Service, Inc. can "challenge the Substitute for Return and file a new tax return in its place. This will greatly reduce and sometimes eliminate the tax debt altogether.