As a taxpayer, you have a legal obligation to file tax returns with the IRS and the state each and every year. Failing to file your taxes can put you at risk of harsh penalties ranging from fines and fees to criminal charges. In many cases, the IRS and the State of Maryland may even file a tax return on your behalf. These submissions may not accurately reflect your actual tax liability and could end up costing you a lot of money. The tax attorneys at Gabaie & Associates, LLC can design a solution and strategy to resolve your tax issues. Call us today to request a free consultation.
Penalties for Not Filing Your Taxes
Interest & Fees
What happens if you do not file your tax returns and have an unpaid tax liability? At the very least, your unpaid taxes will accrue interest. Unpaid taxes will also be subject to fines and fees. This means that the longer you wait to pay your taxes, the higher the amount will be. The IRS has a limited amount of time to go after your tax debt, but the state of Maryland can pursue back taxes indefinitely.
Property & Licensing Consequences
Both the IRS and state of Maryland have the authority to penalize you if you do not file your tax returns. The IRS may assess liens and levies on your property, while the state of Maryland may prevent you from renewing state-issued licenses. These penalties can be incredibly costly and prevent you from operating business as usual.
Failing to file your tax returns can also result in criminal charges. In most cases, the government will try to persuade you to file prior year returns and pay your tax debt using the power of penalties. When these attempts are unsuccessful or fraud is believed to be a factor the government may consider initiating a criminal investigation. Tax fraud convictions can result in up to 5 years in prison and $250,000 in fines.
Agency Filings On Your Behalf
The government may also choose to file tax returns on your behalf. The IRS can file what is known as a Substitute for Return (SFR), while the state of Maryland can file what is known as a Non-Filer Assessment. Each of these tools allows the government to use any income information (e.g., W-2 wage statements, 1099 filings) they have to create a substitute return. This substitute return will not include exemptions, credits, or deductions that you would normally take for yourself and will usually overstate your tax liability.
Before the IRS or Comptroller of Maryland can create an submit a substitute return, they may send you multiple notices by mail. The letters you receive will notify you of the agency's intent to file a substitute return on your behalf and give you the opportunity to fix the situation. You have the option to submit a tax return on your own during this time or propose alternative solutions. If the government has already created a substitute return, an experienced tax attorney can help you contest and resolve the situation through audit reconsideration.
Get Help With Your Unfiled Tax Returns
If you have unfiled tax returns it is important to speak with an experienced tax attorney as soon as you can. Not filing and paying your taxes can have serious consequences. The IRS or state of Maryland may even decide to file a substitute return on your behalf. These substitute filings will likely require you to pay much more in taxes than you actually owe. We help taxpayers to prepare back taxes and get the returns into the system before enforcement action is taken. The tax attorneys at Gabaie & Associates, LLC can help you resolve the matter and find a solution that works for you. Call us today to request a free consultation and learn more.