by Louis Meeks on December 13, 2014 in Blog
FILING PAST DUE TAX RETURNS
There are many reasons that an individual or business may not timely file their federal or state income tax returns. Perhaps you knew that there was some event that occurred in the past year that would cause you to incur a tax liability for the year, and you were not sure how to pay for it, so you just decided not to file at all. Maybe your business fell behind on its bookkeeping and you were unable to get the return completed in time to file. You might even have not filed for several years, thinking that it was no big deal because you knew you didn’t have a tax liability and just didn’t want to deal with the paperwork.
Whatever the reason, if you have past due tax returns, they should be filed as soon as possible. Not filing your past due income tax returns can lead to severe consequences. For one, any unpaid tax gathers interest and penalties from the final date of filing, whether the return for that tax is filed or not. Thus, when you do eventually file that return, your tax owed could be substantially increased by these accrued amounts. Further, having unfiled and/or past due tax returns could affect your ability to obtain loans for you or your business, as most financial institutions will request to review your filed returns before lending you any substantial amount of money. For self-employed individuals who do not file their returns, a failure to file means that there is no way for the Social Security Administration to determine your earnings for that year, leading to no credits applied to your Social Security retirement or disability benefits, and thus lessening your benefits if/when you needed them in the future.
In some cases, a failure to file your past due tax returns leads to the Internal Revenue Service filing a “Substitute For Return” (SFR) for that tax year. When the IRS files an SFR, in most cases does not include all of the deductions and exemptions that you may otherwise be entitled to receive on your filed return. As such, the resulting liability owed on a SFR is generally much higher than the balance you should rightfully owe for the income you received; nevertheless, without a filed return, this is the amount the IRS will seek and eventually collect from you.
On the other side, for those unfiled individuals or businesses that actually would be entitled to a refund if they filed their returns, be advised that you must file your return to claim the refund within 3 years of the date that the return was due. The IRS will not issue a refund to you without a filed return requesting this refund. Even if you eventually file your return with a request of refund, if the due date of the return you filed is more than three years past, you will not receive that refund!
At Victory Tax Solutions, we can prepare your past due tax returns and get them filed for you. Our experienced staff is ready to assist you with any return that will benefit your situation, and can even help in many cases where you are unable to locate your tax documents for the tax year(s) at issue. Call one of our account executives at (877) 772-0123 today!
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