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August 4, 2020


The dangers of failing to file tax returns

Some Texas residents fail to meet the IRS’s yearly deadline. Instead of filing an extension, they simply forgo filing their tax returns. This may be due to a fear of the amount owed, the inability to pay any balanced owed or a lack of the proper documentation needed in order to file. Regardless of the reason, failing to file tax returns for one year could easily turn into not filing for several years out of fear of the total amount due along with interest and penalties.

Regardless of the reason, letting those tax returns remain unfiled for any length of time will ultimately result in some issues with the IRS. In addition to possibly losing out on a refund, encountering issues when applying for loans, and losing out on Social Security credits, another danger exists. The IRS could file the returns for the taxpayer.

If the IRS does end up filing the missing returns for an individual, the income portions of the returns may be correct, but the deductions and credits will not only be wrong but most likely missing altogether. The IRS will not take the time to research this information on behalf of the taxpayer. This will undoubtedly result in a larger than necessary amount due on each return, which means unnecessary amounts in penalties and interest as well.

Fortunately, the taxpayer does not have to simply accept the results of these IRS-filed returns. Once he or she receives the notice from the IRS regarding the estimated taxes owed, the individual will have a limited amount of time in which to object to the amounts. It may be possible to file amended returns and otherwise convince the IRS that the assessments are incorrect.

This may seem like an easy task, but it may not end up that way. Taking on the IRS alone is rarely a good idea. In order to correct the situation surrounding failing to file tax returns, it would probably be a good idea to work with an experienced Texas tax attorney in order to increase the chances of finding a resolution to the issue that does not necessarily break the bank.