Facing an IRS Audit? Seattle Tax Law Attorney Can Help
Washington Tax Law Firm Focused on IRS Audits and Back Taxes
If you fail to file a federal tax return and you owe taxes, you can expect further collection efforts from the IRS. Seattle residents who may be facing an IRS audit can enlist the help of tax attorney Lana Kurilova Rich, whose practice focuses on federal tax issues of all levels of complexity.
Potential Outcomes of Failing to File a Federal Tax Return
Even if you cannot afford to pay all the taxes you owe, you should still file and pay what you can, and even if you owe nothing to the IRS, there are still negative consequences for not filing.
- Tax penalties. Should you fail to file your tax return by the due date, including extension due dates, you will be assessed a failure-to-file penalty of 5 percent per month on the tax balance owed, although the penalty cannot exceed 25 percent of the tax balance owed. If you file your return more than 60 days after the due date, the minimum penalty is $135 or 100 percent of the unpaid tax.
- No refund. If you are due a refund from the IRS, you won’t receive it if you don’t file your return within three years.
- Loss of tax credits. Tax credits that are not claimed within a specific time frame cannot be claimed at all.
- Substitute return consequences. If you don’t file a tax return, the IRS will file a Substitute Return, or SFR, for you, but they will only give you one exemption, no dependents, only the standard deduction, and no credits or other deductions.
- Bankruptcy won’t be an option. You cannot file for chapter 7 or chapter 13 bankruptcy if you have unfiled tax returns. To file for chapter 7, all tax returns need to have been filed at least two years before declaring bankruptcy, and in chapter 13, you must have filed four years of tax returns before filing for bankruptcy.
If the threat of an IRS audit is looming or back taxes and unfiled returns are keeping you awake at night, the tax attorneys at Lana Kurilova Rich PLLC will provide honest answers and options for resolution. Contact us online, or call (425) 289-0629 for an initial phone consultation today.
