Non-Filers: Act Quickly and Carefully to Minimize Risks

With the government straining under the pressure of an ever-tightening budget, the IRS has stepped up its efforts in recent years to ensure that taxpayers are meeting their tax obligations – and California residents may be particularly affected by one of its newest enforcement methods.

In December, a federal judge gave the IRS permission to start tracking down tax dodgers by examining California real estate records. By comparing the state’s records to their own, IRS officials hope to identify people who have transferred property between family members without paying the appropriate taxes on the transactions. Similar programs are in place in about 15 other states.

BE PROACTIVE TO AVOID HARSH CONSEQUENCES

Whether for gifts, income or any other type of tax, people fall behind for any number of reasons. While a few may deliberately avoid paying the taxes they know they owe, many others become delinquent as a result of being unable to afford the payments due, procrastinating or making a simple oversight or miscalculation in the amount of tax they owe.

Whatever the reason, the consequences of failing to file a tax return can be costly. For instance, a delinquent taxpayer may forfeit a refund or end up owing more than his or her initial tax obligation because of penalties and interest. In some cases, non-filers can also be subjected to a wide range of criminal and civil sanctions for failing to pay including the possibility of a year in jail for each delinquent return.

Fortunately, people who are delinquent in filing their taxes are often able to avoid the harshest consequences of delinquency by taking proactive steps to resolve the situation as soon as they become aware of it. Even individuals who cannot afford to pay the full amount they owe may be able to reach resolution by negotiating a compromise with the IRS.

LEGAL HELP IS AVAILABLE

Because the stakes can be high when it comes to filing a delinquent tax return, it is essential that the process take place quickly and accurately. If you have concerns about delinquent tax liability, a tax attorney who has experience in providing non-filer assistance can work with you and negotiate on your behalf to minimize your legal and financial risks.