Filing a tax return might feel like a problem you can put off indefinitely, but the reality is that consequences can mount quickly. In addition to the risk of fines and fees, you could also face higher tax bills and even aggressive collection efforts from the IRS.
If you are dealing with unfiled tax returns in Richmond, you need the help of a professional. An experienced tax attorney can advise you of your options while helping you get caught up on your filings.
You can run into more than one issue when it comes to Richmond unfiled tax returns. Some of the most prominent issues include:
When you do not file your return, the IRS can assess a failure-to-file penalty. This penalty grows each month your return remains unfiled, up to a maximum percentage of the unpaid tax. In addition to the penalty itself, you will also be assessed interest over time.
If you are entitled to a refund from the IRS, failing to file your return could keep you from receiving it. Many taxpayers are surprised to learn they lost money simply because they waited too long to file.
The IRS will not always sit back and wait for you to file your return. The government can take active steps to collect against you, including placing liens on your property or issuing levies against your wages. Without a return in place, the IRS can also estimate what you owe and tax you based on that amount.
If you do not file, the IRS can prepare something called a Substitute for Return, or SFR. The IRS uses income information it receives from employers, banks, and other sources to create the return.
An SFR rarely works in your favor. The IRS does not include deductions, credits, or exemptions you may qualify for. It might even treat you as a single filer when you are a married head of household. The end result is that your tax bill is usually higher compared to when you file a return on your own.
You still have the right to file your own return and replace the substitute, and an attorney can assist with this process.
Getting caught up on unfiled tax returns is simplest when you have the help of a Richmond attorney. Your lawyer can gather your records and deal directly with the IRS on your behalf.
An attorney will also help you file accurate returns for each missing year. This step is critical because it establishes the correct amount owed and stops the failure-to-file penalties from growing. If the IRS has already filed a substitute return, your attorney can replace it with a proper filing that reflects your true financial situation.
Once your returns are filed, the focus shifts to resolving any balance due. This may involve setting up a payment plan, negotiating a reduced settlement, or requesting penalty relief when appropriate. An attorney also communicates directly with the IRS, which helps avoid mistakes and missed deadlines that could lead to more aggressive action.
Having unfiled returns is an issue, but there are options for taking control and getting back on track. The good news is that you can tackle this challenge with the help of a dedicated tax attorney. Reach out today to discuss your unfiled tax returns in Richmond.