Some people claim that there are only two certainties in life: death and taxes. Except when it comes to taxes, it seems that nearly everyone procrastinates to the last moment before filing. Unfortunately for some, this procrastination can become paralyzing and they may fail to take any action whatsoever on the tax filing. In some cases, people simply dread the unknown and fail to go through the steps necessary to file one’s tax return. Other times people may believe that their contribution to the overall tax pool is so small that the IRS would never notice if they did not file. In the end, both of these assumptions are misguided and can result in serious issues for the taxpayer.
To put it frankly, income thresholds that give rise to a legal duty to file are set so low that the vast majority of Americans (or specifically Californians) have a duty to file. The failure to file can result in several penalties, such as a “failure to pay” penalty, a “failure to file” penalty, and other consequences. If agents and auditors come to believe that your failure to file is a willful attempt to commit tax fraud, you could even face criminal tax evasion charges.
The tax attorneys of the NewPoint Law Group, LLP can assist you with, and even resolve, unfiled taxes and other problems resulting from non-filing status. In some cases, you may be able to claim a tax refund. In other situations where you owe money, our lawyers can negotiate on your behalf to reduce the amount you owe or enter into a payment agreement.
Who Is Require to File U.S. and California Taxes?
It is probably safe to say that the vast majority of individuals living and working in the U.S. have a duty to file taxes. Consider that for the 2015 tax year, a sole filer incurred an obligation to file after earning just $10,150 in gross income. Income limits are higher for senior citizens, but only marginally. Likewise, married couples filing jointly have increased thresholds before they must file, but the fact remains that most people do have a legal duty to file taxes.
One should note that the duty to file taxes is separate and distinct from the duty to pay taxes. In fact, as stated above, it is possible to incur penalties for both the failure to file and pay taxes. Furthermore, should you file for an extension, that automatic extension applies only to the filing duty. If your estimates show that you are likely to owe taxes to the federal government or the California state government, you must pay a significant portion of those taxes – -typically at least 90 percent – to avoid potential penalties.
Filing Taxes Is the Only Way to Obtain Tax Refunds
It is also important to understand that the only way an individual can obtain his or her tax refund is to file a tax return. A failure to file a tax return can mean that you are giving the government money you would otherwise have in your pocket. If you have failed to file taxes, you can still claim past refunds, but there is a time limit on how long you have to do so. If you do not file your tax return within three years of the original filing deadline, your refund will be permanently forfeited to the U.S. government. Therefore, it is essential to file taxes for this reason as well.
Unfiled Taxes Can Result in Perpetual Audit Risk
Perhaps one of the harshest consequences of one’s failure to file taxes is that unfiled taxes can theoretically create unending potential liability for the failure to file, and any other underlying alleged problems or fraud. Consider that tax audits are typically subject to a three-to-six-year statute of limitations period. However, the limitations period does not begin to run until the taxes are filed–meaning if you fail to file, the running of the limitations period never begins, and you could face liability for the taxes even decades down the road.
Fix Unfiled Taxes with Aggressive and Strategic Roseville, California Tax Attorneys
If you have unfiled taxes, you face a number of potential risks that can range from penalties for a failure to file and pay all the way up to potential tax evasion charges. The tax attorneys of the NewPoint Law Group may be able to help you address these potentially serious problems and rectify your tax non-filer status. To schedule a confidential legal consultation, call 1.800.358.0305 or contact us online.