Unpaid Tax Returns:The Facts

It's a felony to not file tax returns, so regardless if you cannot pay taxes, file your return. If you don't file, you may be sentenced to a year in prison and fined up to $25,000 per year for each year that you did not file.

The IRS uses the computerized Information Returns Program to find nonfilers. This program matches W-2s with tax returns to determine if you've filed. A Taxpayer Delinquency Investigation is started if a return is not found. They'll look for you to get an explanation why you did not pay your taxes. A notice will be received by you. If you do not reply to the notice, you'll probably get phone calls or even more correspondence. Don't think that since it's been a number of years since you've filed taxes and you have not heard from the IRS, that you're off the hook. In time, the IRS will find you.

Some methods the IRS utilizes for notification:

• Written notices
• Telephone call or a letter with due date notification
• Visit or telephone call from an agent who'll also give ou a deadline
• Visit from a special agent for criminal investigation

The IRS could file your taxes for you, but you do not want them to do this because they'll use standard deductions with no dependents and you will end up settling higher taxes. Prepare your own return and ask that it be accepted, rather than signing the return they mail to you.

Looking for information and the right forms is the most difficult part of filing late tax returns. You may need to get W-2 and 1099 forms for the years you have not filed. You cannot use 2003's form for your 2005 return. You will be able to get the forms from the local IRS office, IRS website, or with the assistance of a tax professional.

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Originally posted 2008-01-28 05:19:04. Republished by Blog Post Promoter