Paying income taxes on the success you or your business have experienced is an individual’s contribution back to the United States and part of what makes this country great. From the tax revenues provided by successful businesses, hard-working individuals, and other commercial ventures the local, state, and federal governments obtain funds to maintain the transportation and communications infrastructure, provide for education and training, and provide important social services.
However in recent years many hard-working individuals have noticed the distinctly anti-tax rhetoric that has come through Washington D.C. To many taxpayers, it seems as if our elected officials have nothing positive to say about the IRS and the way it conducts its operations. Some taxpayers may even decide or believe that the IRS’ actions are improper. However, taxpayers are still required to file, pay, and satisfy all other applicable tax obligations regardless of their own personal beliefs or the beliefs of elected representatives. Taxpayers who fail to file taxes, pay taxes, or satisfy other tax obligations in a timely manner can face significant fines, penalties, and other tax consequences including potentially exposure for tax crimes.
While some individuals can avoid the filing of income tax, the truth is that most individuals living and working in the United States will be required to file by the April 15 filing deadline. This is due to the fact that the gross income a taxpayer may have before filing is relatively slight. Furthermore, even people without a strict filing obligation often file taxes because the only way to receive a tax refund is to file.
The amount of gross income an individual can have before an obligation to file income taxes is based on one’s age and filing status. For instance, for the 2014 tax year a single filer under age 65 was obligated to file income taxes after he or she earned $10,150 in gross income. In contrast a single filer age 65 or older is not required to file until he or she has $11,700 in income. Married taxpayers filing jointly, head of household, and qualifying widowers with one or more dependent children also can earn more gross income before they are required to file taxes.
Taxpayers who fail to file or pay taxes can face serious penalties for their noncompliance with the U.S. Tax Code. While the reasons behind failure to file or pay taxes can vary, the key in determining the level of liability you face is whether the actions or inaction was willful. Willful acts are those acts or failures to act that involve a voluntary or intentional disregard of a known legal duty. For instance, a taxpayer who intentionally works to cover-up and conceal past filing errors is considered to act willfully. Likewise, a taxpayer who intentionally endeavors to avoid learning about this year’s tax filing deadline has engaged in willful blindness (which can constitute willful behavior in certain circumstances especially were foreign accounts and unreported income are at issue).
A taxpayer’s willful failure to file his or her annual income tax report can be punished under 26 USC 7203. Willful failure to file taxes can be punished by up to a one year federal prison sentence and significant fines and penalties. The taxpayer must also be required to pay back the amounts he or she gained through a tax fraud or tax evasion scheme as restitution. If the taxpayer attempts to hide or otherwise conceal his or her failure to file, he or she may be charged with the obstruction of the administration of the tax code or face felony (rather than misdemeanor) Spies Evasion charges. Taxpayers who allegedly commit such acts can, upon conviction, can be punished by a federal prison sentence of up to three years.
If you suspect a past filing mistake may cause big problems down the road or if you have already received a letter or other communication for the IRS, the experienced tax lawyers and CPAs of the Tax Law Offices of David W. Klasing can fight for you. We are experienced in dealing with the IRS and work to devise a strategy that is likely to mitigate the tax situation faced by the taxpayer by reducing penalties while permitting the taxpayer to come back into compliance with the tax code while simultaneously minimizing exposure to potential tax crimes. To schedule a reduced-rate tax consultation with one of our experienced and dedicated tax professionals, call us at 800-681-1295 or contact us online today.