In both IRS and State tax situations, when an individual or business has unfiled tax returns and back taxes it can lead to some of the most severe consequences. Most individuals or business owners fail to realize not filing tax returns is a crime that the IRS will pursue. Under the United States Federal Penal Code if you are deemed willful in failing to file a tax return, it is a Federal misdemeanor for each year you did not file. Further, if you fail to file multiple tax returns, the IRS can look at it as an “overt act of tax evasion”, which is a felony under Federal law.
When not filing tax returns whether it be Federal or State, the other eventual ramifications include receipt of the CP59 letter from the IRS. This letter is a request for the taxpayer to file a return. After which, if a tax return isn’t filed, the IRS or State will file a Substitute for Return (SFR) for each year of unfiled taxes. The unfiled years would be filed at a married single or as a single filer status. Deductions or credits would not be allowed, and the return would be filed at the highest possible tax bracket based on information the IRS or State have regarding your previous income.
After filing an SFR, the IRS will assess a Failure to File penalty of 5% each month the return is unfiled until the maximum penalty of 25% is reached. The IRS will do this for every year you did not file. Our tax attorneys in Orlando, FL have seen hundreds of situations where back taxes of a few thousand dollars end up being tens of thousands of dollars as a result of the Substitute for Return filings and the penalty imposed for every unfiled tax year.
Unfiled Tax Returns Impact Qualifications for Stimulus Checks
In the post-Coronavirus world of unfiled personal and business tax returns, failing to file a 2018 or 2019 Federal tax return will cause you not to receive a Coronavirus Stimulus check. The unfiled tax returns will also preclude you from receiving future Coronavirus Stimulus money. For business owners in Orlando, FL who desire taking advantage of the Payroll Protection Program loans that are included in the Coronavirus Stimulus Package (CARES Act), unfiled tax returns will deny them access to those funds.
Unfiled tax returns always lead to severe tax problems that can make any individual or business owner feel hopeless. Even when a person or business commits to getting their back taxes filed, they often don’t have their W-2 information or know how to get it. A W-2 is required from past employers to ensure that your past unfiled returns accurately reflect the income you received.
Our Orlando Tax Attorneys Can Help with Unfiled Tax Returns
The tax attorneys at J. David Tax Law in Orlando, FL have access to the IRS database that allows us to retrieve any income and W-2 information needed to file tax returns from one to twenty years ago. Getting your family or business into tax compliance with the IRS and State leads to peace of mind that you may not have experienced in many years. When you know you haven’t filed and that the IRS, State, or both are after you, you are robbed of your peace of mind. Contact J. David Tax Law in Orlando, FL now at (407) 603-3962 for a no-cost, no-obligation consultation with a tax professional so you can have greater peace of mind.
At J David Tax Law, only a tax attorney will handle your case. We have a full staff of tax preparers that can piece together the most complex tax returns.
He is the founder and Managing Partner of J. David Tax LawSM. He is the winner of the 2019 Ultimate Tax Attorney awarded by the Jacksonville Business Journal. This award recognizes law firms and attorneys who show exemplary professional talent and skill while demonstrating superior client care, leadership, charitable concern, and civic engagement. Jonathan graduated from Chapman University School of Law. He has practiced law since 2011.
We provide tax solutions for our clients who have IRS and state tax debts, unfiled returns, audits, etc. We advise you on future compliance that enables your individual or business tax problems to be behind you for good.