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An unfiled tax return is the set of documents that detail the unstated tax from an individual or business. In most cases, unfiled tax returns can span a number of years and can often culminate in the Internal Revenue Service (IRS) taking legal action against the specific individual or company. Often, most taxpayers state that they did not file their tax returns because: a) they did not know how to start and b) they missed one year and are now afraid to file another one in fear of the repercussions. This creates a vicious cycle and it is the taxpayer, not the IRS, who suffers the most.
The IRS has a program called the Substitute for Return that files the tax for companies or individuals that fail to file a tax return. This program files a default tax return which (almost always) leaves the taxpayer owing money to the federal government. This is because the IRS does not take into account the intricacies of taxpaying, such as deductions and exemptions, and files the tax return as is. In these cases, the taxpayer may find himself owing money and requiring to pay his unstated tax.
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Not filing a tax return is considered a crime, but this can also result into a deep financial problem in the future. A business will be on public record as an establishment with poor credit, while an individual may not be fully entitled to some government-sponsored benefits and may not be able to apply for a loan in the future. Additionally, the IRS may decide to compound the interest to the tax debt of non-filers. At maximum, this can reach an astonishing 47.5 percent. When this happens, the taxpayer needs to find representation in order to properly dispute any case the IRS may file. To avoid this, it is wise to have a tax negotiation firm handle all the financial aspects of the business.
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Wall and Associates Inc. is a leading tax negotiation and representation firm. Learn more about tax filing by visiting this Google Plus page.
