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Unfiled Tax Returns

The willful failure to file a tax return is a federal crime.  The IRS has the power to impose stiff fines and penalties, including imprisonment, on U.S. taxpayers who willfully fail to file their federal tax returns.  When the IRS catches up with a taxpayer who has failed to file a tax return and owes money to the government, the taxpayer will be required to pay the taxes due along with a substantial fine and interest on the total amount owed. 

While many taxpayers do not file their federal returns because they think they will be unable to pay what they owe, failing to file a return is big mistake.  In fact, in most situations the penalties for not filing your tax return are much harsher than the penalties for not paying the taxes due.  Additionally, the IRS offers options for individuals and businesses that do not have the financial means to cover their entire federal tax obligation. These options include entering into an installment agreement with the IRS or making an offer in compromise (OIC).  An OIC is an agreement between the taxpayer and IRS which allows the taxpayer to settle an outstanding tax liability by paying an agreed-upon reduced amount.  Making an OIC is a complicated and time-intensive process.  The attorneys at Thorn Law Group can review your situation to determine whether the IRS Offer in Compromise program is appropriate for your situation. 

Failure-to-File Penalties

Taxpayers who do not file their federal taxes by the filing deadline are subject to a failure-to-file penalty.  The penalty for filing a late return is typically five percent of the unpaid taxes owed for every month or portion of a month that the tax return is late, up to a maximum of 25% of the unpaid taxes.  If the government determines that a taxpayer has willfully failed to file a tax return, the taxpayer can be subject to a fine of up to $25,000 ($100,000 for corporations) or imprisonment for a term of up to one year for each year the taxpayer failed to file a return, or both.  Should the government find that a taxpayer’s failure to file constitutes tax evasion, the taxpayer could be punished with a fine of up to $100,000 ($500,000 for corporations) or a prison term of up to five years for each year the taxpayer failed to file a federal return, or both.

Contact a Maryland Tax Attorney to Review Your Options

If you have questions about tax filing requirements or have failed to file a federal tax return, you should consult with an experienced tax law attorney immediately.  Failure-to-file penalties can be severe and, depending upon the circumstances of your case, you could be subject to criminal prosecution.  A tax attorney at Thorn Law Group can review your situation in confidence and identify all options that may be available to you. 

To learn how an experienced tax law attorney can help you navigate a difficult situation with the IRS, contact Kevin E. Thorn, Managing Partner of the Thorn Law Group, at ket@thornlawgroup.com or phone our Maryland satellite office at 240-235-5096.


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