What Happens When You Don't File Your Taxes

You may think that what you do will never be noticed by the IRS because of the millions of other taxpayers. What difference does it make if you don't settle your taxes? You are not right, unfortunately, as the IRS will notice. What are the penalties for not filing your taxes? Who will you refer to - will the IRS be of assistance

The IRS sees non-payment of taxes as stealing money from the government and considers it punishable by law. Levels of penalties vary depending on your tax status:

* Filing for taxes late
* Not filing for taxes at all
* Penalties for not paying your taxes

The penalties for filing your taxes late are so far the easiest to deal with. The IRS tacks on a penalty of 5% per month. Tax returns filed in June when it is due on April 15 gives you an interest of 15%.The maximum penalty is 25%.

What should you do if April 15 is fast-approaching, and you still did not file your tax return?

Should your circumstances call for an extension in filing for your taxes, you may call the IRS. One way of doing this is by filling out Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Once the request is approved, you are allowed until August 15 to take care of your tax returns. If this period is inadequate, filling out Form 2688 gives you more time. It is imperative that you request for an extension as doing otherwise automatically gives you the 5% interest.

You do not buy time to pay for your taxes when you file for an extension. The law requires that you should pay at least 90% of the total taxable income or else you will be given a monthly penalty of 0.5% This then brings us to the next type of penalty.

You must pay even a part of your tax dues if you cannot afford to settle everything. There are bigger charges for not filing than for not settling the whole amount. Say you owe $5000. If only $1000 is paid , you will only be charged with $20, which is 0.5% of the remaining amount.

Failing to pay your taxes after several months increases the penalty by 1% per month. The IRS can request that you take action to pay, such as mortgaging assets or getting a loan, if you remain to be delinquent on your taxes. They may need to resort to more severe collection methods, like wage garnishment or levying bank accounts.

Before situations become that sever, ask for IRS help. You will realize that they're not the Big Bad Wolf that they were portrayed to be. You can ask for additional time to pay your taxes (from 30-120 days). You may also be able to come up with a payment plan. Other forms of IRS assistance include installment plans, temporary delays and Offer in Compromise, among others. Visit the IRS site for additional information on these options.

Not bothering to file for your taxes at all harbors the most severe penalties. This situation will incur you large amounts of money, aside from making it hard for you to ask for IRS help. You will be charged with 5%-25% of the total taxable amount monthly. Let's take a person owing $5000 and is already 5 months late for filing as an example. Total penalty is 5% times 5 times $5000. This incurs you another $1250, more than one-fifth of the amount you originally owe.

The IRS may accomplish a return and send the bills and fees to a tax payer who, over time, refuses to file. The IRS-completed return will not give the taxpayer deductions he would otherwise be eligible for.If the taxpayer fails to pay or file, then other options may be explored, including filing for criminal and civil charges. Before your tax situation gets to this point, ask for IRShelp. Surely, you can arrive at options that will not effect to serious consequences.