5 Reasons to File Delinquent Tax Returns

The April 15 tax deadline has come and gone. For the millions of taxpayers who failed to file legally required tax returns, tax help is available for those who act now! Even taxpayers who received an extension for filing are not granted more time for the payment of taxes owed and may need income tax relief .

The act of not filing your tax returns can lead to more significant financial problems in the long run. Not to mention, failure to file tax returns may be construed as a criminal act by the IRS, punishable by one year in jail and $10,000 for each year not filed. Needless to say, it's one thing to owe the IRS money, but another thing to potentially lose your freedom for failure to file a tax return.

The longer you put off dealing with overdue taxes, the more serious your IRS problems will be. So I recommend filing any tax returns that are due as soon as possible to avoid additional interest, penalties and potential IRS collection tactics, such as a levy on your bank account.
With the federal budget deficit for the current year expected to top $1.8 trillion, Americans can expect more tax audits and increased IRS actions. So anyone who owes back taxes want to avoid becoming targets of aggressive IRS collection efforts that can financially cripple them for life.

Here are 5 reasons to file your delinquent tax returns :

Even if you haven't filed your tax return for one year - it is still considered delinquent and could be construed by the IRS as a criminal offense. Actor Wesley Snipes didn't report more than $10 million to the IRS and he was convicted of three misdemeanor counts of failing to file a tax return. Richard Hatch, who won the first season of CBS's hit show Survivor, is in prison for failing to report $1 million in prize money.

The IRS goes after those U.S. taxpayers who try to avoid taxes, and Average Joes as are just as likely as high-profile individuals to be targets of the tax-collecting agency. At every level, the agency has become increasingly aggressive in pursuing tax cheats. Are you willing to lose your freedom because you failed to file your tax returns?

In this economic downturn, Americans may opt to not file because they don't have the funds to pay the taxes owed. The best thing for taxpayers in difficult financial situations to do is file their tax return, pay what they can and work with the IRS to establish a payment plan that will keep them compliant.
Additionally, if there are any delinquent tax returns that are due, they should consider filing these returns as soon as possible to avoid the wrath of any potential IRS action, such as a levy on their bank accounts.

If you fail to pay your taxes due, you will incur additional penalties for failure to pay. Taxpayers who request an extension of time to file should keep in mind that this it is not an extension of time to pay. To avoid additional penalties, taxpayers should file by the deadline and pay as much as they can, even if they are unable to pay the entire amount due. You will still have a failure to pay penalty, but it's much less. Then you can work with a specialized tax resolution expert to help you negotiate a tax settlement.

The IRS may prepare a "Substitute For Return" for delinquent taxpayers, in which they won't be able to file for all of their personal exceptions or allowable deductions. Because these returns are filed in the best interest of the government, the only deductions they'll usually see are the standard deduction and one personal exemption, subjecting them to a larger tax liability. So it's important for individuals to file their 2008 tax return as well as any prior delinquent tax returns as soon as possible to save money and avoid significant long-term consequences.

All back tax returns must be filed before the IRS will even entertain any type of tax settlement like an offer in compromise or monthly payment plan arrangement. The good news is the sooner you take care of your delinquent taxes, the less penalties and interest you'll owe.

I believe there's a solution to every problem. For delinquent taxpayer, it's never too late for to resolve your tax debt and avoid IRS penalties.

For more information on receiving income tax relief or help resolving back taxes, visit http://www.taxresolution.com for a free tax relief consultation or call 866-IRS-PROBLEMS.

The Los Angeles Times released a list of California taxpayers with the largest delinquent income tax bills who together owe $143 million in back taxes.

While O.J. Simpson and his $1.5 million bill have been taken off the list (after being sentence to 9 years in prison), Dionne Warwick (who owes $2.18 million) and Burt Reynolds (who owes $225,000) are among the notable names on the list of 250 people with the largest delinquent income tax bills. Actor-comedian Sinbad owes $2.5 million on a tax lien first filed in 2001.

It's not surprising that high profile people have delinquent income tax bills - 1 in 6 (or about 16%) of the taxpaying public have tax problems. And in this down economy, I expect that rate to increase significantly.

The annual list is intended to pressure those with large bills to pay up. However, it only represents only a fraction of the $6.5 billion in personal income taxes that go unpaid each year in California alone. An estimated 21% of federal individual income taxes go unpaid each year - contributing to a $400 billion tax gap yearly.

** If you owe back taxes and need income tax relief, our specialized staff of attorneys, CPAs, EAs and tax professionals can help. Visit the Tax Resolution Services web site for a free tax relief consultation or call us at 866-IRS-PROBLEMS.

I recently blogged about how frivolous arguments topped the IRS Dirty Dozen list of most common tax schemes. And in this bad economy, there will be more individuals maintaining frivolous arguments for not paying their taxes.

While many Americans were paying their taxes on April 15, there's a group of citizens known as tax defiers, deniers or protesters who cite many different reasons refusing to pay their income taxes.

Their frivolous arguments include:

* Income tax is illegal
* The 16th Amendment, which allowed Congress to collect income taxes, was never ratified.
* Paying taxes should be voluntary.
* Only D.C. residents or federal employees are subject to the tax laws.

Defiers often refuse to submit tax returns or file them with bogus information about their earnings (sometimes listing their income as zero.

A recent Washington Post article highlighted a revered Washingon D.C. detective who claimed exemption from his income taxes.

While protesters call the tax system illegal, the IRS disagrees and tax enforcement and convictions are on he rise year over year. And in this recession, individuals will find adopting arguments to not pay their taxes more enticing than ever.

According to the Washington Post, the IRS received more than 10,000 frivolous arguments last year and more than 90,000 pieces of related correspondence. The Justice Department has stepped up enforcement against tax defiers, and the IRS has referred more cases for criminal prosecution: 132 cases in fiscal 2008, up from 74 the previous year and 80 in 2006. The Justice Department also has filed about 100 civil lawsuits since 2001 asking judges to block defiers from promoting or selling related tax-preparation products.

Even though April 15 is behind us, it is important to keep in mind the consequences of not filing your tax returns. It's not to late to file your delinquent taxes!