Call Now (800) 681-1295
Close

“Hunger Games” & Failing to File a Tax Return

Table of Contents

    Date: 04/10/12

    Topic: Non-Filing

    Owing taxes ordinarily is not a crime, but not filing when you have a legal duty to do so is a federal misdemeanor punishable by one year in jail for each year that is delinquent plus penalties. The IRS, with its vast resources, is a relentless, all-searching government agency. Some people think, “If I just don’t file a tax return, well then the IRS doesn’t have anything to monitor, and I can escape their radar.”

    This sort of reasoning is a bit like entering a ticket into the “Hunger Games,” because each non-filing increases the chances the IRS will catch you. I’ve not seen the film (or read the books) yet, but I’m told by my staff that the setting in Hunger Games involves a bleak future where food is rationed by the government (apparently everything economic is government-run), and people are nearly starving. To obtain more food, a person may voluntarily enter his or her name in a raffle. However, if your name is chosen, you have the lucky non-option of fighting to the death against another. Now’s here’s the catch: each time you enter your name, it stays in the “pot,” which increases the odds of it getting picked.

    Non-filing is a bit like that. The IRS has software–very powerful software–to monitor 250 million people in the United States, and many others abroad who are subject to U.S. income tax, to ensure that those with a tax liability do, in fact, file and pay their tax liability.  This software apparently complies various and variegated pieces of information to determine whether you owe a duty to the government to file a tax return.

    The software will consider, for example, whether a taxpayer has stopped filing returns (or have never filed returns) by comparing information obtained from third parties against IRS records (i.e. 1099s and W-2s). For more on how the IRS identifies non-filers, see: How does the IRS identify non-filers?

    The non-filing monitoring not limited to individuals, either. Businesses are also monitored. In fact, recently the Government Accounting Office (GAO), in its Report to the Committee on Finance before the Senate, came up with a new plan of how it would crack down on non-filing businesses. It would take a sample of the inventory and make some reasonable extrapolations on that. According to the Report, the

    The IRS could develop a partial estimate using its business nonfiler inventory. The IRS typically identifies several million potential business nonfilers each year, more than it can thoroughly investigate. The IRS could take a random sample of its inventory, thoroughly investigate those cases, and use the results to estimate the proportion of actual nonfilers in its inventory of potential nonfilers.

    https://www.gao.gov/new.items/d10950.pdf 

     

    Tax Help Videos

    Representing Clients from U.S. and International Locations Regarding Federal and California Tax Issues

    tax lawyers

    Main Office

    Orange County
    2601 Main St. Penthouse Suite
    Irvine, CA 92614
    (949) 681-3502

    Our headquarters is located in Irvine, CA. Our beautiful 19,700 office space is staffed full-time and always available for our clients to meet with our highly qualified and experienced staff of Attorneys, Certified Public Accountants and Enrolled Agents. We also offer virtual consultations and can travel to meet with clients in one of our satellite offices.

    Outside of our 4 hour initial consultation option, we do not charge travel time or travel expenses when traveling to one of our Satellite offices, or surrounding business districts, where it is necessary to meet personally with taxing authority personnel, make court appearances, or any in person meeting deemed necessary for the effective representation of a client. To make this as flexible, efficient, and convenient as possible, David W. Klasing is an Instrument Rated Private Pilot and Utilizes the Firms Cirrus SR22 to service client’s in California and in the Southwest by air. Offices outside these areas are serviced via commercial jet airlines. None of these costs are charged to our clients.

    Satellite Offices

    California
    (310) 492-5583
    (760) 338-7035
    (916) 290-6625
    (415) 287-6568
    (909) 991-7557
    (619) 780-2538
    (661) 432-1480
    (818) 935-6098
    (805) 200-4053
    (510) 764-1020
    (408) 643-0573
    (760) 338-7035
    Arizona
    (602) 975-0296
    New Mexico
    (505) 206-5308
    New York
    (332) 224-8515
    Texas
    (512) 828-6646
    Washington, DC
    (202) 918-9329
    Nevada
    (702) 997-6465
    Florida
    (786) 999-8406
    Utah
    (385) 501-5934