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The Consequences of Not Filing or Paying Your Taxes

What could happen if I don’t file my taxes or pay what I owe?

As the last deadline to e-file your 2015 tax returns rapidly approaches, you may be wondering what will happen if you do not file a return or if you file, but don’t pay your taxes in full.  The following is a look at a few possible scenarios:

You’re Owed a Refund, But Didn’t File

If you are due a tax refund and did not timely file a tax return, you will usually not be subjected to any fines or penalties.  Taxpayers can file within three years from the April tax filing deadline to collect an owed refund. If you wait longer than three years, you lose the right to collect the refund.

You Owe Money and Didn’t File

If you owe the government money and elect not to file a return, you could face large penalties.  Failing to file your tax return will often incur a penalty of five percent per month, with a cap of 25 percent of your unpaid taxes.  If you fail to file within 60 days of tax day or the extension deadline, if you have sought an extension, you will be hit with a minimum penalty of $135 or 100 percent of your unpaid taxes.

You Filed, But Didn’t Pay the Amount Owed

You may have filed a tax return in a timely manner, but failed to pay the full amount of taxes you owe.  Failure to pay could result in monthly fees of .5 percent, with a maximum penalty of 25 percent, in addition to interest.  If the amount owed remains outstanding, you may receive a notice of intent to levy property.  Your per month fine will increase if you do not respond to this notice.  The IRS will often allow you to work out an installment plan that can minimize fines and other penalties.

Anyone who has received a letter from the IRS stating they owe money should contact our licensed California tax collections lawyers at Brunoro Law as soon as possible.  Our firm can assist you in developing a payment plan or otherwise settling your debt in the most favorable manner possible.

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