How You Can Lose Out if You Fail to File Your Past Due Tax Returns

Posted on in IRS Issues

Cook County IRS issues lawyer, past due tax returnsSmall or large business owners and self-employed individuals alike run the risk of losing out significantly when neglecting to file past due tax returns. Failing to file your taxes in general, even when they are already overdue, can cause excessive IRS issues that end up following you long term.

While many people delay filing their taxes or choose to not file them at all with the goal to save money, the idea often backfires. The consequences pile up quickly when the IRS hits them with penalties and interest charges for failure to file and pay the balance owed.

The Negative Impact of Neglecting Your Tax Returns

Avoiding your tax returns can yield unpleasant, immediate consequences, like stressful notices and hefty fines. However, many of those fines have the potential to stick around for some time, due to the vicious cycle that debt and interest charges can put into motion.

Owing debts to the IRS is hassle enough on its own, but when the debt is severe enough and you continue to dodge the responsibility to pay the balance, you may even risk facing community service or prison time. Consider the following less extreme—yet still burdensome—ways you may lose out by failing to file your returns and address your IRS debt:

  • You might not receive your refund. The IRS requires that you claim your refund within three years of the filed return date. Therefore, if you are due a refund for paying estimated taxes or due to withholding and you have not filed, the IRS has the right to hold onto that refund until they receive the past due return. They regularly monitor their records and are able to see when one or more of your returns are past due.
  • You may owe more money. The quicker you file your return and pay your balance, the less you will owe in the long run on interest charges and late payment penalties. Even if you find you have a hefty balance once you file, and there is no way you can afford to pay it all in one lump sum, options are available to you that allow you to pay the balance in chunks, over time. While these options do include interest, you can still significantly decrease the overall amount of your debt by paying more than your contracted amount each month.
  • You may have trouble borrowing money. Financial institutions have access to filed tax returns when you apply for a line of credit. So, if you are trying to take out an auto loan, open a new credit card account, or apply for financial aid assistance, you may be denied or experience delays in approvals when you fail to file your returns.
  • There may be other repercussions. One consequence that affects those who are self-employed in particular is the loss of social security benefits. This happens because any money earned by the self-employed individual is not reported to the Social Security Administration, and when the SSA has no record of these earnings, they do not grant the person the credits that count toward their Social Security retirement or disability.

Take the steps necessary to avoid falling into a deeper financial hole with the IRS by speaking with a competent Cook County IRS issues lawyer the moment you realize you are in trouble. If you want to avoid any of the aforementioned hazards, the key is to tackle your IRS responsibilities as they arise, not once the damage is done. Call the Law Offices of Eric G. Zelazny at 708-888-2299 to address your questions and concerns and receive your personal consultation today.

Source:

https://www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns

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