What Are the Consequences for Not Filing Your Taxes?

You may think that what you do will be unnoticed by the IRS because of the millions of other taxpayers. What difference does it make if you don't settle your taxes? It makes a big difference, and worse, the IRS will learn. What are the consequences for not filing your taxes? Where can you go for help - can the IRS help?

You will probably think that not filing for your taxes is a small thing but the government sees this as stealing and considers it an offense. There are different levels of penalties depending on your tax status:

* Filing for taxes late
* Penalties for not filing your taxes at all
* Not paying taxes

Aside from being called a delinquent tax payer, a number of serious consequences await you as a result of your actions. Let us delve deeper into the penalties mentioned above.

Late filing gives the least overdue fees. Only a 5% monthly interest is added to your total tax due. However,the maximum charge is 25%. Let us take a look at one example. Filing for your tax in June when the deadline is on April 15 gives you an approximation of 15% fine.

What should you do if April 15 is almost near, and you still did not file your tax return?

This is where the IRS can help you: request for an extension. You just have to accomplish Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.You then have up to August 15 to file. For more time, you can use form 2688.If no request is forwarded to the IRS, the 5% penalty starts accruing.

You do not buy time to pay for your taxes when you request for an extension. The IRS laws state that you settle at least 90% of the total taxable amount by April 15 or you will be burdened with a 0.5% monthly penalty. With this, we are now ready to tackle the next type of penalty.

For sure, not paying the whole amount is better than not filing at all. Again, let us illustrate this by saying that you owe $5000. Just paying $1000 gives you a penalty of only 0.5% on $4000, which is a mere $20 monthly. This demonstrates then that you need to file and pay in whatever way you can.

Not paying for your taxes after a number of consecutive months may implore the IRS to resort to more serious action. First, the penalty gets larger by 1% monthly. Then, the IRS may urge you to mortgage assets or file for a loan. Last but not the least, they can employ more rigorous collection methods like wage garnishment and levying bank accounts.

Before situations get overwhelming, refer to the IRS for assistance. They are not the Big Bad Wolf they are often made out to be. You may request them for 30-120 days extension. You may also be able to come up with a payment plan. Other forms of IRS help include installment plans, temporary delays and Offer in Compromise, among others. To know more about these alternatives, you can visit the IRS website.

The most serious penalties are given to those who do not even bother to file for their taxes. Apart from making it hard to get IRS assistance this situation involves huge amount of interests. 5% - 25% of the total taxable amount is charged to you on a monthly basis. Consider the case of a person owing $5000 and is 5 months late for filing. You can compute the penalty using the formula: 5% X 5 X $5000. This costs you another $1250, more than one-fifth of the amount you originally owe.

The IRS may fill out a return and mail the bills and fees to a tax payer who, after a while, refuses to file. The IRS-completed return will not offer the taxpayer deductions he would otherwise be entitled to.The IRS may press for criminal or civil charges should the above move prove to be futile. To avoid arriving at these sorry situations, ask for the assistance of the IRS. Surely, you can arrive at options that will not result to serious consequences.