What happens if I don't file taxes in Denver for several years?
Denver, CO - If you haven’t filed taxes for several years and haven’t heard from the IRS in all that time, you may think they’ve somehow forgotten about you. Time to stop dreaming - the IRS has not forgotten about you and you’re not off the hook. The sad truth is that the IRS can come after you even after 10 years. They’ll want to see your income for all those years, which is an absolute nightmare, you’re facing stiff fines and you may face criminal charges. This means jail time.
The IRS has no interest in sending you to prison. They’re much more interested in getting the money you owe them. If you haven’t filed your taxes for several years you may want to take advantage of this. Get in touch with an experienced tax attorney in Denver and let them deal with your IRS problems.
What to expect if you haven’t filed your tax return on time?
You may receive a summons from the IRS when you least expect it. It’s a reminder that you haven’t filed your tax returns and they are aware of it. It can also mean they’ll be doing it for you. When you forget to file taxes, the IRS will prepare a substitute tax return on your behalf. They won’t be bothering you with any questions. The IRS will use third-party income information, including W-2 and 1099 tax forms, to determine what you owe. If they file a substitute tax return for you, you won’t be getting any deductions.
If you receive notice of a substitute tax return, don’t panic. Contact trustworthy tax attorneys right away. You have 90 days to submit your late tax returns or file a petition with the Tax Court.
What are the penalties for failure to file?
As the IRS sees it, failure to file taxes is worse than failing to pay taxes. Worst case scenario is you could be charged with tax fraud, which could lead to up to 5 years in prison.
The penalty for failure to file is 5% of the unpaid taxes for each month the tax return is late. The IRS won’t charge you a penalty of more than 25% of what you owe, but they will charge interest on the penalty, too.
What to do if you haven’t filed your taxes for years?
There’s really no point in hoping the IRS will forget about you. Instead of waiting for them to knock on your door, you can take the initiative. Gather all your financial records and see some skilled Colorado tax attorneys. You can always file past-due tax returns. If you do that voluntarily, there’s little risk they’ll charge you with fraud or anything.
Obviously, if you haven’t filed tax returns for many years, you probably owe them a lot of money by now. Does it mean you go bankrupt? Not really. The IRS understands they cannot expect all the money at once. Your attorneys will negotiate with the IRS on your behalf. Here are your options:
Installments plan - Your Denver lawyers will negotiate a timeframe and you can pay your dues in monthly installments. You could be granted up to 84 months to pay your full taxes, which is not that bad.
Compromise offer - If you couldn’t possibly pay what you owe, the IRS might agree to a compromise. This could work if you have minimum income and little-to-no assets. Basically, they’ll settle for what you can give them.
Non-collectible status - The IRS may agree to forgive your debts if your attorneys can show you have a hardship in the family and there’s no way you could pay your back taxes.
