Consequences a Tax Payer will Face if He Fails to File Tax for Years

by lawfirm on January 2, 2013

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(US criminal law) A taxpayer who has failed to pay the tax for years might feel that the probable penalties will be lenient. However, in actual their offense is similar to that of the taxpayers who have ignored paying tax deliberately. Thus the declared legal penalties will be more or less similar for both the offenses.

Hence, if you fail to pay the tax for a few years, be prepared to face the legal consequences.

Legal Consequences you may Face:-

According to US law, a taxpayer failing to pay his past taxes will be considered as an offence. Obviously heavy fine ( about  $25,000) will be imposed for each due tax year. Along with this, there is a possibility of facing  imprisonment for a year. However, the IRS will ask you to pay the fine rather than going to the prison. Hence, the IRS has less chance of prosecuting you for your offense.

Moreover, the IRS can calculate up to 25% of the due tax payable amount for a particular year. This option doesn’t save you from not paying the added interest imposed over the penalty amount. As a  result the amount gets added up including the due taxable amount.

However, you have the chance to make an appeal to the IRS for reducing the penalty amount.

Reducing the penalties:-

You may have committed the offense but you still have the chance to ask the IRS to reduce the penalties. To do so, you obviously need to provide valid reasons for not being able to pay the due amount. There are few circumstances that the IRS might consider, they are:-

  • Death of a close family member
  • Physical or mental illness
  • Misguidance from your accountant
  • Alcoholism

If you face these problems, the IRS will consider your situation and may reduce the already imposed penalties.

Untangling the past tax due amount:-

If you wish to solve this unpaid tax amount issue, call up the IRS. However, before you call them up make sure you have the legal guidance from tax attorneys for safety. When you give  a call to the IRS, they will in turn call you up and ask for little personal information like name, address, social security number and employment details. Along with this information, they will ask you to decide a deadline within which you will be able to pay the due tax amount.

However, if you feel that you are unable to pay the amount within the decided deadline, ask for the extension of the deadline beforehand. You can even ask them to provide the details of the previously paid tax amount.

Once you have paid partial amount from the due amount, you can ask the IRS to compromise with the penalties that has been issued against you.

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