Non-Filed Tax Return Lawyer

The US Federal government subjects taxpayers to extremely strict reporting requirements.  Among the most basic and important of these reporting requirements is the simple filing of an annual income tax return.  Should you fail to meet that single requirement, you risk exposing yourself to rather costly penalties.  You could even be subject to criminal charges. Nonetheless, while it is critical that you take steps to correct delinquencies and deficiencies as quickly as possible, you also should not rush into the process with no guidance from an experienced non-filed tax return lawyer and CPA who can assist you in  minimizing your liabilities, avoiding disputes with the IRS, and reducing any additional penalties that you may owe.

The CPA lawyers at our firm serve our clients more than 20 years of dedicated legal and financial experience.  To arrange for your initial consultation with a non-filed tax return attorney, call our offices today!

What’s the Difference between Non-Filed Tax Return and. Failure to Pay?

At first blush, these two phrases appear to be almost interchangeable.  This is a common misconception. In fact, the failure to file and the failure to pay are actually two separate matters.  This distinction is critical primarily due to the fact that it means that each failure can result in a unique, separate set of penalties.  The IRS will even tell you that the failure-to-file penalty is customarily the harsher of the two.  Therefore, they place higher priority on filing prior to arranging any kind of payment plan.

In general, a failure-to-file penalty comes into play when you miss the filing deadline, while a failure-to-pay penalty applies when you don’t make the payment deadline.  This explanation may seem pretty straightforward, but the regulations are sometimes far more complex in situations where extended deadlines apply.

For instance, the failure-to-file penalty would not be applicable if you ask for a filing extension prior to the original due date for your return.  That said, if you request an extension and then you fail to pay a minimum of 90% of your liability by the original due date, you could still get assessed a failure-to-pay penalty.  For you to avoid a failure-to-pay penalty, you would have to pay at least 90% of your liability by the original due date, and then you will need to pay any outstanding balance which remains by the extended due date.

With regards to deadlines, it is also critically important to bear the statute of limitations in mind.  Although the statute customarily places a firm time limit on the window for legal proceedings, in this context, the countdown starts once a return is actually filed.  The effect of this is that non-filed returns would not be subject to any statute of limitations - which means you don’t have the option to “wait it out.”

Monetary Penalties for Late Filing or Late Payment

The late filing penalty is 5% of your unpaid taxes for every full or partial month that a return was late, with a limit of 25%.  However, should you be delinquent by more than 60 days, after either the original date or the extended date, the minimum penalty would be either 100% of the unpaid tax, or a flat fee of $135 - whichever amount is lower.

If you neglect to pay by the due date, you could be fined half of 1% of your unpaid taxes for every full or partial month beyond the payment deadline.  As with the late filing penalty, the maximum is 25% of your total unpaid taxes.

Interestingly, should both a failure-to-pay and failure-to-file penalty be applicable during the same month, the delinquent payment penalty actually reduces the delinquent filing penalty.  This would normally be 5%.  If you can successfully show  the IRS that you were late on a filing or payment due to a reasonable cause, and you didn’t deliberately and willfully neglect to file, it is possible that you could avoid being assessed any failure-to-file or -pay fines. Ultimately, this is contingent on a determination made by the IRS, which means that having an seasoned tax lawyer and CPA guiding and representing you can increase your odds of avoiding penalties.

Is The Failure to File a Tax Return a Criminal Offense?

We would be remiss not to point out that if your non-compliance is determined to be a case of willful neglect, you could be looking at serious criminal tax charges.  According to 26 U.S. Code § 7203, “Any person required… to pay any estimated tax or tax, or required… to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution.”

Simply put, a willful failure could cost you $25,000, a year in behind bars, and a lasting criminal record.

Don’t wait until it’s already too late to repair your situation and bring yourself back into compliance.  To set up your initial consultation, call our non-filed tax return lawyer as soon as you can by phone or online.