So April 15th has come and gone. It’s one of the least favorite days on the calendar. Some people file for an extension ever year at tax time, while others work feverishly to get them done by April 15th. So what happens if you don’t file your taxes?
Obviously, we don’t ever recommend using this as a strategy. As the famous saying goes, the only thing you can count on in life are death and taxes. Beyond the interest you will owe for failure to file/failure to pay/underpayment issues, there could also be a number of penalties that you could face as well.
Criminal Fraud
Unless you want the old Wesley Snipes issue, evading paying taxes is illegal anyway that you slice it up. It’s our opinion that the IRS is going to get even tougher on these non-taxpayers, and if you are found guilty you could be subject to massive court determined fines, jail time, or possibly both.
Civil Fraud
If for some reason you don’t quite rise to the whole tax evasion issue, you could be subject to civil fraud. According to www.irs.gov, the penalty is 75% of the portion of the tax underpayment attributable to the fraud.
Negligence
The next really difficult question to answer is really around whether or not you intended to defraud the IRS or really were you just neglecting filing the taxes. In this case the penalty is 20% of the portion of the underpayments attributable to the negligence. (www.irs.gov)
A Frivolous Return
Some people think it’s cute to be a court jester with the IRS. In these difficult economic times, some taxpayers may protest the IRS by making their job more difficult than it should be. Generally, a frivolous return may omit information that makes it necessary to determine a taxpayer’s liability such as their Social Security number. There can be a fine imposed of $500 per frivolous return.
No matter how many years you are behind, filing taxes is like saving for retirement. It’s never too late to start. Get all of your tax documents together, and get yourself down to a good tax preparer to begin sorting through the mess. It’s either get them done, or one day you could find yourself doing jail time.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your specific individual situation. The opinions expressed and material provided are for general information. Copyright Thorium Wealth Management 2016.