Despite most Californians and Americans having a duty to file their income tax return, people come up with many justifications as to why their failure to file doesn’t matter or isn’t a big deal. Some people believe that they aren’t making enough to file taxes. Others think that even though they may have some earnings, surely they can’t be enough for the IRS to notice or to care. Other people may simply get busy and their obligation to file may slip their mind. In still other cases, travel to a foreign country or even medical problems can distract a taxpayer from satisfying this annual obligation.
Unfortunately, while it is easy to explain away and justify the failure to yourself it will not be easy to convince an auditor, examiner, or special agent from the IRS. Furthermore, there is always the chance that the examiner may misperceive innocent behaviors and actions as badges of frauds and signs that you willfully endeavored to defeat or avoid your obligations under the tax code.
The experienced attorneys of Newpoint Law, LLC understand the stress and anxiety people with tax concerns face. We strive to provide answers to your questions and concerns. To schedule a free and confidential consultation to discuss unfiled taxes or other concerns call us at 1.800.358.0305 or contact us online.
Who Must File Income Taxes?
Most Americans who are working at least a part-time job or who have at least some income are likely to have an obligation to file taxes. Please keep in mind that the obligation to file taxes is separate from the obligation to pay taxes. That is, some people may only need to file taxes and others pay be required to do both. The factor that determines whether one is legally obligated to file taxes is your annual gross income. Gross income is your pay before payroll taxes are deducted. In 2014, a individual who is a sole filer and under the age of 65 would be required to file taxes once he or she earned $10,150 in gross income. An individual filing with the same status but age 65 or older, would have to file after $11,700 in income.
These thresholds make clear that most Americans have a duty to at least file taxes. The amount of income one can earn prior to the filing obligation being triggered is relatively little. Even taxpayers with little to no income may have an interest in filing a tax return however, aside from documenting their yearly income for disability or other purposes, filing one’s tax return is the only way to receive any refund one may be entitled to receive. However, the failure to file within three years of the original due date will result in the forfeiture of any return the taxpayer would have otherwise been able to claim.
Penalties for Tax Non-Filers
Individuals who fail to file their taxes can face significant penalties. Unfortunately, individuals who fail to file their taxes face a higher than average rate of audits. This increased audit risk can lead to taxpayers facing serious examinations where additional wrongdoing is uncovered that compounds their liability. In some cases, an examiner may even mistake certain innocent actions as art of a pattern to conceal income or otherwise evade or defeat tax. In any case, penalties can be imposed for both the failure to pay taxes and the failure to file taxes. The penalty is imposed for each month or part of a month where the tax obligation went unfulfilled. The interest and penalties on these obligations can quickly escalate to a point where they become unmanageable. Taxpayers who address tax problems proactively and before years of penalties and interest accumulate are typically more able to mitigate the consequences of their past noncompliance. However, some taxpayers with significant tax liabilities can negotiate for tax relief from the IRS.
Seeking Tax Relief for Unfiled Taxes? Contact One Of Our Tax Lawyers
If you have failed to file taxes and now fear significant amounts of IRS fines, penalties, and interest the experienced tax lawyers of Newpoint Law, LLC can negotiate with the IRS and attempt to arrange for tax relief. We can explore possibilities including innocent spouse relief, offer-in-compromise, and other forms of tax relief. To discuss you options in handling unfiled tax call our firm at 1.800.358.0305 or contact us online.